Your credit report includes information about where you live, how you pay your bills, whether you’ve filed bankruptcy and what kind of debt you have.
It’s important to check its accuracy because the score that comes from this information affects whether or not you can get a loan and how much you will end up paying in interest.
Finding misinformation can also help you discover cases of identity theft.
So you’ve accessed your free annual credit report and found an error for a missed payment (or any misinformation) that’s negatively affecting your score – now what?
Under the Fair Credit Reporting Act (FCRA), both the credit reporting companies (Equifax, TransUnion and Experian) and the credit provider (i.e. the credit card company or bank) are responsible for correcting incorrect information on your credit report.
1. Reach out to the credit reporting agencies.
Draft a dispute letter, making sure to clearly identify each incorrect item, state the facts of why you dispute each claim and request deletion or correction.
Make sure to only use copies, keeping the original documents for your records. You may even want to include a copy of your credit report with incorrect items circled to highlight your corrections.
“The credit bureaus now have
user-friendly online dispute systems.”
Send all the information by certified mail and request a return receipt so you know when the agencies have received your information. They typically must investigate the items within 30 days.
To make things easier, all three of the credit bureaus now have user-friendly online dispute systems on their websites.
2. Reach out to the creditor/information provider.
Similar to the process above, send a dispute letter with copies of your documents by certified mail to the creditor.
Some companies have specific addresses for disputes. Request to be copied on correspondence between the creditor and the credit bureaus.
This process takes approximately 30 to 90 days and your dispute must be reported to the reporting agencies.
Photo source: creditsesame.com.