How to Dispute Your Credit Report

About Disputing Credit Reports

Errors on your credit report can have long-term negative consequences, and not just in terms of purchases, but also in terms of your future.

Credit reporting agencies such as Experian, Equifax and TransUnion all collect personal information about you such as where you live, where you work, whether or not you’ve ever encountered legal troubles and if you’ve ever filed for bankruptcy.

They then take this information and sell it to creditors, employers and other persons or organizations that want to determine your creditworthiness.

If your report turns up something negative, it can adversely impact your credit score as well as your reputation. For this reason, it would be in your best interests to dispute the credit report and ensure that all false information is corrected.

Review Your Credit Report for Inaccuracies

Whether or not you suspect that there is an error on your credit report, you should review it periodically, and for three excellent reasons:

First, your credit report is essentially the only document that matters when you apply for a loan. Whether you want to finance a new vehicle or pull a second mortgage out on your home, the lender is going to review your report first.

If they find unappealing information within it, they will either deny you your loan request altogether or grant you the loan but at an outrageously high interest rate.

Secondly, if there is an error on your credit report, it may not be an accident. Identity theft is on the rise, with an estimated 15.4 million U.S. consumers affected each year, and $16 billion unaccounted for. If you notice a delinquent or new account on your report that you didn’t open yourself, you may be a victim of identity theft.

Thirdly, credit agencies process millions of pieces of data on millions of consumers. Mistakes are bound to occur and there’s no guarantee all information on your credit report is completely accurate.

Steps to Challenge a Credit Report Error

If you notice an error on your credit report, don’t chalk it up to a mistake or absent-mindedness on your part. Even though it is possible that you made a mistake of your own in the many years you’ve been building a credit history, you can’t know for sure unless you file a credit bureau dispute.

Below are the steps you need to take to dispute the credit report in question:

1. Collect Documentation

Even if you are 100 percent confident that your credit report contains an error, you won’t get very far with the reporting agency if you don’t have the evidence proving that the mistake is legitimate. Examples of evidence could include:

  • Proof of payment on a paid-off collections account that is still showing as unpaid
  • Proof of a paid tax lien that is more than seven years old
  • Proof of bankruptcy, in which one or more accounts should have been discharged
  • Proof that an account was opened in your name, unbeknownst to you
  • Proof that you never lived at or used as a mailing address the address listed on the account
  • Proof of inaccurate personal information (name, social security number, birth date)
  • Proof of inaccurate employer information

Depending on the nature of the error, all, some, or none of these evidence examples may be just what the credit bureau needs to determine that you are telling the truth and that a mistake was made.

2. Inform the Company of Their Inaccuracy

Unfortunately, you can’t just call the credit agency up and let them know that you think there’s been a mistake. To file an official complaint, you must write to the agency and let them know which information you believe is inaccurate.

Include a detailed account of the facts and a thorough explanation of why you are disputing the information. Send in copies of your documentation that support your position, as well as a copy of your report with the disputed items circled. Send the letter and the documents by certified mail, with a “return receipt requested” stamp.

This will help you ensure that your letter was received. Once you know your documents were received, you can start counting down the days until you receive a response.

Typically, a credit reporting agency is required to review your items and give you a response within 30 days. However, if they believe that your dispute has no backing and that you are just trying to wriggle your way out of a bad credit score, they will not bother responding. For this reason, you want to be absolutely certain that the information is inaccurate and have the proof to show it.

3. Notify the Information Provider

Legally, the credit agency is required to forward your information and dispute letter to the information provider. Upon receipt, the furnisher is required to review your data, investigate the claim and report back to the agency with their findings.

If the disputed information matches up with what the information provider finds, they are obliged to inform each credit bureau so that they can change the information in your file so that it is true and accurate.

However, despite the fact that the credit bureau is supposed to inform the furnisher, they may not—especially if they believe that your claim is frivolous. By informing the information provider yourself—and by including all the documentation that you sent to the credit reporting agency (copies, not originals)—you are ensuring that a proper investigation is conducted.

Additionally, even if an investigation doesn’t resolve your dispute, you can rest easy knowing that you tried.

4. What To Do if You Disagree With the Results

If the credit reporting agency does not correct the credit report errors, you are not without options. For starters, you can provide additional information or a recap of your dispute to the credit bureau in the hopes that they have a change of heart.

In your summary, include a brief account of your original claim, as well as a list of the supporting documentation you sent in. Though doing this is not guaranteed to yield any results, it doesn’t hurt to reassert your stance.

Another step you can take if you don’t agree with the credit agency’s decision is to file a complaint with the Consumer Financial Protection Bureau, your state’s Attorney General’s office or your state’s Department of Consumer Affairs. If you believe that your investigation took far too long and was treated without proper attention, one of the organizations mentioned above may be able to turn up information that the furnisher or credit bureau couldn’t or was unwilling to.

If this is the case, not only will your credit report change but also, the credit bureau could end up in hot water.

Finally, while you may not be able to resolve the dispute in your report officially, you can ask the credit reporting company to include a statement of your dispute in your file. Anyone who requests a copy of your report will receive a copy of your statement as well. While this isn’t guaranteed to reshape their impression of you, it can plant the seed of doubt that maybe you’re not as irresponsible as your credit report makes you out to be.

Common Mistakes to Avoid

While consumers are entitled to certain rights under the Fair Credit Reporting Act, you may unwittingly undermine those rights by doing any one of the following:

Bypassing the Terms of Agreement

While all three credit bureaus allow consumers to purchase their credit reports whenever they’d like, some—such as Equifax—include an arbitration agreement. By purchasing a report with an arbitration clause, a consumer unwittingly waives their right to a judge and jury.

Be wary of this, as if you are forced to go to arbitration over the dispute, the credit bureau is entitled to hand select the mediators. If you decide that you don’t have enough evidence to prove your claim, you must opt out via mailed letter within 30-60 days. If you don’t, you will be forced into arbitration. If you lose, you will be required to pay all arbitration costs, as well as any other fees associated with your case.

Omitting Information

When filing a credit bureau dispute, most people opt for convenience by choosing to use an online dispute system. While these systems certainly make the process go much faster, they purposefully don’t allow for extensive explanations or a place to attach supporting evidence. By using one of these systems, you may be saving yourself time, but it could cost you your case in the long run.

Listening to the Debt Collectors

The debt collectors will tell you anything to get you to pay a debt, including that you’ll be fined or even be sued and quite possibly end up in jail. For one, this is harassment, and it’s illegal. Secondly, if the debt in question is more than seven years old, it should be wiped from your report per the Fair Credit Reporting Act.

If this is the case, creditors are not legally allowed to contact you. However, if you fall for their scare tactics and end up making a payment on an expired debt, you could restart the clock on the debt’s statute of limitations, thereby undermining your ability to fight back.

If there are inaccuracies on your credit report, don’t just assume that they’re due to your mistakes. Dispute the credit report just to be 100 percent sure. If you win, you could end up changing the course of your future, and if you don’t, there’s no harm done. For more information feel free to reach out to one of EcoCredit specialists.