What to do if You Find a Mistake on Your Credit Report
Emma Ross had spent years saving towards a downpayment on a new home. But just when she thought she had zeroed in on the right property, a major error on her credit report brought her dream of homeownership to a screeching halt
It turns out that Emma's Experian credit report showed that one of her old credit cards still had a balance due of over $2,400 - even though she had paid off the card years ago. Despite the fact that TransUnion and Equifax correctly reported the account as paid off and closed, the error sunk her credit score.
Experian's mistake meant she didn’t qualify for the best mortgage rate with her bank. “Instead, they tacked on another 0.75%, which took my payment up several hundred dollars per month and made it so I couldn't afford that home. I was devastated."
The sad part is Emma's story isn't unique.
In fact, mistakes and inaccuracies appear on credit reports more often than many people believe. CNBC recently reported that 34% of Americans have at least one error on their credit report. Some mistakes may be small, like misspelled names, addresses, or other typos in your personal information. Other mistakes, like an incorrect payment history, or the appearance of phantom credit accounts that aren't yours, are much more troublesome.
That is why it is important to check your credit report frequently and if you find a discrepancy, spring into action right away.
Where to get started?
You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion). You can request a copy from AnnualCreditReport.com.
Once you have your reports, read through them carefully. There may be small differences among your reports because some creditors don’t report your account activity to all three bureaus. However, if negative information has popped up on one report, it’s wise to see whether it’s also on the other two.
Some credit report errors to look out for include:
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Name misspellings (common when family members share similar names, or when changing your name after marriage)
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Duplicate accounts
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Incorrect accounts
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Fraudulent accounts (especially if you’ve been a victim of identity theft)
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Information or accounts from an ex-spouse
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Incorrect payment statuses
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Outdated information (like negative accounts over seven years old)
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Incorrect date of first delinquency on a collection account
I found an error. Now what?
1. File a dispute with the credit reporting company
If you spot an error in a credit report, you should file a formal dispute with the credit reporting agency and explain in writing what you think is wrong, why, and include copies of any supporting documents. The good news is that the dispute process is completely free. Under the provisions of the Fair Credit Reporting Act, the credit bureau must investigate the error and update you with the results of its investigation within 30 days. Remember, your goal is to make it as easy as possible and quick as possible for investigators to confirm that your complaint is valid.
Typically, your dispute letter should include:
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Contact information for you including complete name, address, and telephone number
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Explanation of why you are disputing the information
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A copy of the portion of your credit report that contains the disputed items
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Copies of bank / credit card statements or loan documents that clearly show why the report is in error
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Copies of birth or death certificates, or a divorce decree, if necessary
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In the case of identity theft, include a copy of the FTC complaint or police report.
When writing your letters, please remember to be clear and concise. Explain your situation step by step and give the agencies only the key facts necessary to understand the situation. Remember, these agencies receive hundreds of requests each day. Adding irrelevant information can confuse the examiner, especially when they’re learning about your situation for the first time.
Also, keep in mind that if the error is on all three of your credit reports, you’ll need to submit a separate request to each credit bureau involved.
All three bureaus have an online dispute process, which is often the fastest way to fix a problem.
To submit a dispute online, visit the following sites:
Equifax - https://www.equifax.com/personal/credit-report-services/credit-dispute/
Experian - https://www.experian.com/disputes/main.html
TransUnion - https://www.transunion.com/credit-disputes/dispute-your-credit
2. Dispute the information directly with the company who provided the information
One of the best things to do if you find an error is go directly to the source (the creditor) to dispute inaccurate credit report items. Several years ago, rules were passed that made it possible for consumers to dispute inaccurate credit information directly with the creditor. Under the Direct Dispute Rule, companies that “furnish” information to the credit bureaus such as a bank, credit card issuer, lender, debt collector or loan servicer must investigate disputes requested by the consumer.
Steps to dispute directly with the creditor
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Write your dispute letter stating what you believe to be inaccurate.
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Make sure to use the correct address. If the creditor (or debt collector) specifies a particular address for receiving disputes, you must send your dispute letter to that address.
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Request deletion of the inaccurate information.
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Attach copies of your documentation backing up your reasoning for the dispute.
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Furnishers of information (creditors) are required to conduct a reasonable investigation and report the results to the consumer, generally within 30 days.
The good news is that there is hope and it is possible to get errors fixed yourself.
Emma was able to write to Equifax and explain the situation. "After about six weeks," Emma explained, "I got a note that the item was removed and my score went back up to where it was supposed to be. I found a new house, in a better location, and was able to get the loan without an issue. I'm just grateful that it all worked out in the end."
Posted in Credit Guide
