Fixing Errors on Your Credit Report

Errors on credit reports are common

It’s highly likely that your credit report contains some kind of error, whether minor or serious. A government study found that 79% of credit reports contained mistakes. The study also found that:

• 25% of credit reports contained serious errors, such as false delinquencies and accounts that that did not belong to the consumer. These types of errors have a negative effect on your credit score and your ability to get a loan.
• 54% of credit reports contained misspelled, outdated, or inaccurate personal data like name, address, and employer.
• 22% listed the same mortgage or other loan twice. 

Check your credit reports regularly

These statistics alone are reason enough to check your credit reports regularly. Rather than stick your head in the sand, you should be proactive about reviewing your reports for errors and taking the necessary steps to fix them. An error-free credit report can mean the difference between being approved or denied for a loan. Ensuring your credit report is accurate means lenders will offer you the best interest rate that your credit history merits. It’s up to you to confirm that your credit reports contain your correct history.

Go over your report with a fine-toothed comb. Look closely at each account’s information, including balance amount, date opened, status, and notes. Also check the public record section and the inquiry list.

If you find an error on a report from one credit bureau, make sure you pull your reports from the other two bureaus as well. The Fair and Accurate Transactions Act (FACTA) states that each of us is entitled to a free credit report from each bureau annually. This means that you have the legal right to a free credit report from Experian, Equifax, and TransUnion every year. Annualcreditreport.com is the official government site to claim your free reports, or you can call 1-877-322-8228. 

The dispute process

Under the Fair Credit Reporting Act, credit bureaus and information providers (the lenders and creditors that report your account and payment history to the bureaus) are responsible for fixing any mistakes on your report. So you’ll want to communicate with both parties, especially about account-specific errors relating to payment history and status. 

First, notify the credit bureaus. You’ll have to dispute an error directly with each credit bureau that is issuing the incorrect information. You can dispute errors either online, by phone, or mail. The bureau websites will encourage you to submit disputes online, but certified mail is your best option because it leaves a paperwork trail. Include copies of supporting documents to prove your case. For instance, you should send a copy of your driver’s license or social security card to prove your correct name, address, or social security number. Or, send a copy of your on-time payment to disprove delinquency. The bureau websites will have downloadable forms you can use to file a dispute. Read the information on their websites for more information.

Then, notify your lender or creditor. Send a dispute letter and copies of relevant documentation to the information provider (i.e. your lender or creditor). Again, use certified mail so you create a paper trail. The information provider may have an address specifically for disputes listed on their website.  

Stay organized during the dispute process. Keep a folder containing copies of every letter and piece of documentation you send during the dispute process. Include certified mail receipts, details of phone calls, and a calendar marking the dates that activity occurred. The law requires that all disputes be resolved within 30-45 days, so mark that deadline on your calendar as well. Write a follow-up letter if you don’t hear anything from the bureaus after day 50 or so. 

The investigation

Once a credit bureau receives your dispute, they legally have 30-45 days to investigate it, or have the option to dismiss it as “frivolous”. A bureau begins an investigation by notifying the relevant information provider of the dispute, and asking them to look at their records to verify the information. If the information provider finds that the disputed information is inaccurate, it must notify all three credit bureaus of the error. 

When the investigation is complete, the credit bureau must give you a written notice of the results. If the dispute resulted in inaccurate information being changed or deleted, the bureau must give you a free updated credit report reflecting the changes. If the dispute was discharged as frivolous, or the information provider verified the item in dispute as accurate, you can launch the dispute process again, or complete a consumer statement to be attached to your credit report. This consumer statement would explain to potential lenders your situation and point out the information you believe to be inaccurate.  

Is it identity theft?

If there is an account that you don’t recognize on your credit report, it’s possible that someone opened it in your name without your authorization. This is identity theft. First, call the organization behind the unauthorized account. Explain that you did not open the account, and you want it removed from your credit report. Next, you’ll need to notify the credit bureaus and place a fraud alert on your report. You may also need to file a police report. Remember, keep a log detailing every action you take when trying to recover your stolen identity.