How to Dispute a Credit Report

Dispute Credit ReportSimply put, your credit report is a record of all of your financial activities that involve the use of credit, such as with loans or credit cards. It lists any remaining balances you may have on your accounts and also documents whether you have been reported due to unpaid bills. While your credit report is supposed to be a good representation of your credit history, according to the most recent statistics available, about 70% of all credit reports contain some sort of error that may hinder consumers from acquiring important loans, credit cards, insurance, mortgages or even a job.

These types of errors are typically the result of incorrectly merged information from different sources. While errors vary, most of the common errors are the following: the misspelling of demographic information; including long-outdated information (or including information that belongs to a stranger); listing the same mortgage or loan twice; the listing of closed credit accounts as open; and not including major credit, loan, mortgage, or other accounts that display a consumer’s creditworthiness.

Because of these inaccuracies, it’s recommended that consumers check their credit reports quite frequently. But since there is only a limited amount of times one can acquire a free credit report per year — a maximum of three; one from each credit bureau — consumers should be aware of all the advantages and disadvantage of requesting multiple credit reports all at once or spreading them out throughout the year. FreeCreditReportGuide.org  offers a list of credit-check strategies for various types of consumers. With that said, this reference guide is designed to walk consumers through the process of disputing errors if one is found (which by law can be done at no cost). Do note that it is important consumers know the differences between negative information and errors however. If negative information is indeed correct, it will remain on a consumer’s credit report for the next seven years.

Step One: Order Free Credit Report

By law consumers are given permission to access three free credit reports every 12 months. There are several different ways consumers can order their free credit reports, but there is only one Web site authorized to fill orders for free online — that’s annualcreditreport.com.

Do not be duped by fraudulent Web sites that are waiting to steal all of your sensitive information, such as your social security number. Once you have access to your free credit report, scan it for inaccuracies and pay particular attention to balances, dates of last activity for each account, credit limits, and payment history. If an error is found, you need to immediately file a dispute in writing with both the credit bureau who gave you the report and the creditor who submitted the data, such as an insurance company, a credit card company, department store, landlord, or a financial institution, for example.

Step Two: Write a Dispute

Disputes cannot be resolved over the phone. They must be completed in the form of a tangible letter. The letter should be addressed to the “Error Resolution Department” and include all of the following elements: your name, address, the information you are disputing, and the reason the information is not accurate. Be sure to make it clear that you are requesting a complete deletion or correction of the inaccurate information. If you have proof supporting your dispute, such as a statement, receipt, or cancelled check, make sure to include photocopies of those documents as this evidence will make your case stronger. You may even want to include a photocopy of your credit report and circle the inaccurate sections to make the process a little easier. Always keep the original documents for your records because they can get lost in the mail. Make sure to proofread and edit. Lastly, sign and date the letter. For a better idea of what the letter should look like or how to dispute multiple errors, the Privacy Rights Clearing House provides a sample letter for consumers.

Step Three: Deliver Letter Via Mail

It’s best to send your letter to the proper agency via certified mail and request for a return receipt. This way, if something goes wrong you will have proper documentation of when you sent the letter. Note that it may take the agency’s “Error Resolution Department” a while to get to your letter. However, an agency will typically finish its investigation within 30 days. Do know that unfortunately if an agency feels as though your letter and or complaint(s) can be seen as irrelevant or “frivolous,” your dispute may hold no weight. While waiting for your results (and to expedite the process), you can take the initiative of calling the original creditor who made the mistake and notify him or her (or the business) that you are making a dispute. You may then proceed to mail them a similar dispute letter that you sent to the credit report agency. After the investigation is completed, the crediting agency will contact you via standard mail to notify you whether your dispute is valid or not. If it is, the crediting agency will then notify all of the other credit agencies to correct the issue in their system and will also notify the creditor to correct the issue as well. However, if you are denied and not satisfied with the outcome of the investigation, you can appeal the decision.

Step 4: Follow Up

Even if you get approved, you want to follow up within 30 to 60 days to make sure that your credit report has been properly amended. It might also be a good idea to request that the crediting agency sends a correction notice to any businesses that might have accessed your credit report within the past six months.