Credit report errors are far more common, with nearly 70% of credit reports coming with errors. These errors can have a detrimental impact on your overall credit score, costing you higher in interest rates on loans and mortgages, job opportunities and other crucial facets of your life. Therefore, you need to know how you can dispute credit report error in order to fix credit and have a better score. First, you need to obtain your annual free credit report. You can do that thru annualcreditreport.com. Get all 3 credit reports because the information contained in one file is often be different from the other two.
So, what are the common credit report errors?
• Identity theft, where someone uses your name to open and run an account
• A retailer or a creditor misfiling information, especially about your credit card transaction
• Inaccurate postings claiming that you missed some payment
• Simple mistakes that confuse your name with a family member’s name or a stranger with the same name as yours
• Double listing your loan information
• Absence of some vital positive information
All these errors can have a severe impact on your overall credit score hence you need to dispute and have them corrected.
Importance of disputing your credit report errors
As already mentioned, errors, especially those in the form of negative items in your credit report, can significantly harm your credit score. Thus, apart from lowering your chances of securing loans, they can also affect your interest rates on insurance cover, mortgages and loans. A poor credit score resulting from errors in your report can also ruin your chances of securing any formal employment. In addition, the psychological trauma that comes with a bad credit score can be very devastating. In other words, a bad credit report courtesy of errors can affect the overall quality of your life, leading to frustrations and resentments. This is why you need to check your credit report regularly, identifying and fixing errors that may appear to be lowering it in order to have an impressive report.
Step-by-step tips on how to dispute a credit report error
Having known the kind of credit report errors that you are likely to encounter, you need to know what you should do once you have spotted them. First off, you need to know that it is within your right to dispute any errors that are appearing on your credit report. As such, the credit bureaus as well as your creditors are required by law to investigate every credit report dispute, including the source of the error. Therefore, if you discover an error in your report, you need to contact the credit bureaus that sent you the report informing them of the errors that you have identified in the report. These can be TransUnion, Equifax or Experian. If the error came from two or three of the bureaus, then you need to contact each of the bureaus that issued the erroneous report. Here is a step-by-step process of what you should do.
i. Get all the relevant information
The credit bureau will need proof that your credit report has errors. Therefore, you need to gather all the relevant documents, both original and photocopies, to back up your claims. You need to make a copy of your credit report highlighting all the erroneous entries that you want corrected. In addition, you need to know all your rights, incase the credit bureau agent or creditor tries to undermine and dismiss your dispute. Unless the credit bureau or creditor has valid reasons to justify that you are making frivolous claims, they are required by law to investigate and correct your claims within 30 days.
ii. Contact the credit bureaus that issued the report
Using a certified mail or letter, you need to contact the credit bureaus that issued the erroneous report. You need to highlight the error and why you believe this information is inaccurate. In your letter, include copies of your documentation to justify your claims. Never send the original documents. Also in your letter, ask the credit bureau to investigate and correct the errors. Ensure that you send separate letters to each of the bureaus that sent erroneous reports.
iii. Contact your creditors
While the credit bureaus are investigating your claims, ensure that you contact your bank, lenders, insurance company, mortgage company the credit card company and any other entity that provided inaccurate information to the credit bureaus. Send to these companies copies of everything that you sent to the credit bureaus, including a copy of your letter of dispute. In your letter to these entities, ask them to provide you with the records of the transactions that you are disputing in order to have them in your records.
Under the Fair Credit Reporting Act (FCRA) both the credit bureau and the entity that provided the inaccurate information must investigate and correct all the justifiable errors in your report. This should be done within 30 days from the time you file your complaint. Once the credit bureaus have received your letter of dispute, they will forward the information to the entities that provided inaccurate information. These entities will then have to investigate the disputes to figure out what went wrong. After their research, and establishing the source of error, they will provide the correct and accurate information to all the three credit bureaus in order to make changes to your credit report. Even if there is no error, these entities will still communicate to the credit bureaus, justifying their position and why they feel the disputed item should remain in your report.
Once the credit bureaus have received corrected information, they will provide you with an updated credit report, indicating all the corrections that have been effected. Once an error has been removed from your report, it cannot reappear again.
It is important that you look at your credit report at least once every year. This is worth your time and effort since it directly affects your credit score. A poor report courtesy of simple errors can cost you thousands of dollars in high interest rates on insurance, mortgage and loans. While correcting these errors can be stressful and time consuming at times, you need to remain focused in resolving them in order to fix credit and have a good score.
