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Fixing Credit Report Errors

Fixing credit report errors may not be high on your priority list right now, but it should be. The impact of credit report errors on your finances can be very detrimental. Inaccurate payment information or serious errors regarding balances might make it difficult to get a loan or insurance, open a utility account, or even get a job.

How common are credit report errors?

According to a Congressional Research Service Report on Consumer Credit Reporting, the accuracy of consumer information in consumer data reports has been an ongoing policy concern. Incorrect information in a credit report may limit a consumer’s access to credit in some cases or increase the cost of getting credit in others. The Federal Trade Commission (FTC) reported that 26% of participants in a survey of credit report accuracy were able to identify at least one error on at least one of approximately three different credit reports.  After the wrong information was corrected, 13% of the participants saw one or more of their credit scores increase; many of them significantly!

As a consumer, it’s important for you to advocate for yourself when it comes to fixing credit report errors.

Five Credit Report Errors to Watch For

  1. Identity errors. You may find a mistake in the spelling of your name, the wrong name, phone number, or address. You may even find accounts on your report belonging to another person with a similar name. If this occurs and the person with a similar name is not as diligent as you with paying bills on time, it may negatively affect your credit score.
  2. Accounts you don’t recognize. Mysterious accounts that appear on your credit report may be the result of identity theft. This is something you’ll want to address immediately.
  3. Account status errors. When checking your credit report, you might find closed loans or other accounts that are still reported as open with balances. You may find higher balances on some accounts than you actually have. You may also notice duplicate accounts, which can make it appear your debt is much higher than it actually is. Any of these errors may impact credit utilization, which can in turn affect your credit score.
  4. Balance errors. Accounts with incorrect current balances or inaccurate credit limits can also have an effect on your credit score. If it’s a significant mistake, the resulting impact on your score might also be substantial.
  5. Creditors who incorrectly reported accounts as being charged off or in default. 

Fixing Credit Report Errors with the Credit Bureau

You can’t fix credit report errors if you aren’t aware of them. Correcting a credit report error begins with requesting a copy of your credit report. You can request a free copy of your credit report one time each year from each of the three main credit reporting companies – Equifax, Experian, and TransUnion. You can do this quickly and easily by visiting annualcreditreport.com.

Once you receive your credit report copies it’s time for a thorough review. If you find a mistake, you’ll need to contact the credit bureau that issued the report to request a correction. You do this by filing a dispute. It’s important to note there is no fee for filing a dispute. Filing a dispute will not negatively impact your credit score in any way. In fact, if the dispute has resulted in a correction in your favor, it may even lead to an improvement in your credit score.

To file a dispute, you need to inform the credit bureau in writing what information you believe to be inaccurate. If there are errors in all three reports, you will need three separate letters. Begin by providing the current date and all of your contact information and account names. List out each error and provide a concise explanation. Include a copy of your credit report with the incorrect information highlighted. You will also want to attach or include any supporting documentation. For example, bank statements showing payments made or loan closing documentation. Include what you would like the credit bureau to do to correct the situation. This can include removing an item, correcting a balance, etc.  You can provide letters or you can also dispute through an online form (links below).

An example letter:

You Name, Address, Phone Number, and Email

Date

Credit Bureau Name

Address

Dear Sir or Madam:

I am writing today to dispute specific information that I found to be incorrect on my credit report. I have highlighted the incorrect items on the enclosed copy of my credit report.

This item (name line item) is incorrect because (explain what is incorrect about it)

Continue with a listing of all errors found.

I am requesting that the item be removed (or corrected) as soon as possible, so this is reflected in my credit report. Enclosed are copies of documentation to support my request.

Please investigate this matter and make the corrections as soon as possible.

Sincerely,

Name

Enclosures (list of what you are enclosing – a copy of credit report, supporting documentation)

Submitting Your Credit Report Disputes

You can file your disputes through online forms or via mail with a letter like the one above for the appropriate credit reporting agency:

Equifax

Dispute Department

PO Box 740256

Atlanta, GA  30374

Click to submit an online dispute form

Experian

Dispute Department

PO Box 4500

Allen, TX  75013

Click to submit an online dispute form 

TransUnion

Consumer Dispute Center

PO Box 2000

Chester, PA  19016

Click to submit an online dispute form

Review Credit Report Dispute Results 

A dispute investigation may take 30-60 days or more to complete. If the credit bureau agrees with your request, you will receive the results in writing. In addition, you can request that the credit bureau send notice of your credit report corrections to anyone who received your credit report in the past six months. If your dispute was denied,  you can still request that a written statement of the dispute be included with your credit report. If you still feel strongly about your dispute you can file a complaint with the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).

Monitor Your Credit Reports

It may take some time after a dispute for a correction to appear on your credit report. Continue to monitor your report to watch for the correction. It will also help you to spot any other errors that may appear. Your credit report is an important part of your overall financial health. Mistakes on your credit report can and do happen. It might be something as simple as an inconsistency with your name or a clerical error. It might be a creditor reporting error, or it might be something as sinister as identity theft. That’s why monitoring your report and fixing credit report errors is so important.  Read our Benchmark Blog each month for more to help you improve your financial well-being.

 

 

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