Credit Report Definition and How to Dispute It In 5 Steps

Credit report errors are a fairly common occurrence in the consumer market. Determining the best method for disputing errors on your credit report is essential. Here’s what to do if you find something in your credit report that doesn’t belong there.

Step 1 – Verify Inaccuracies On Your Credit Report

Check your credit reports on a regular basis for any errors or missing information. At annualcreditreport.com, you can obtain one free credit report from each of the three main credit agencies — Equifax, Experian, and TransUnion — once a year. You may also pay for a credit monitoring service and examine your credit report once a month.

Some of the most common credit report errors you might find include:

  • Errors in identity such as a mistyped name, phone number, or address.
  • A “mixed file” is a file that contains information about another consumer’s account. When you and another consumer have the same or similar names, this can happen.
  • An account that has been wrongly attributed to you as a result of identity theft
  • An account that has been closed but is still being reported as open.
  • When you are only an authorized user on an account that you are incorrectly reported as the account owner.
  • A resolved delinquency, such as a collections account that you paid off but still displays as outstanding on your credit report.
  • When a payment is beyond seven years old or your last payment date is wrong, the account is mistakenly labeled as a delinquent.
  • A debt appears more than once on your credit report with an identical account name and account number.
  • More than one creditor on a single account.
  • Account balances that are not correct.
  • Incorrect credit limit information.
 
How a credit report inaccuracy might affect you

Keep an eye on your credit report, but is it really important to do so? Is it possible for a single mistake to have a lasting impact on you? Yes. Your credit report contains a wealth of information about you, such as how you pay your bills and whether or not you’ve ever filed for bankruptcy in your lifetime. Errors on your credit record might have a variety of severe consequences for you.

To begin, it’s crucial to understand that credit reporting firms sell your credit report information to a variety of organizations, including employers, insurance, utility companies, and others, who wish to use it to verify your identity and assess your creditworthiness.

Step 2 – Get In Touch With The Lender

The next step is to contact the lender or the company that provided the incorrect information on your credit report.

This could be a financial institution or a utility company. Confirm the inaccuracy by checking their records. At this point, you might be able to address the problem. If the problem persists, contact the credit reporting agency directly.

Step 3 – Dispute The Inaccuracies On Your Credit Report

The FCRA or The Fair Credit Reporting Act is the legal benchmark for all things credit, lenders that report information about you to the credit bureaus are obligated by The Fair Credit Reporting Act to accept consumer disputes – and to rectify any erroneous or incomplete information about you in the report.

 The FTC which is also referred to as The Federal Trade Commission suggests that you take the following measures:

  • Let the credit bureau know in writing what information you believe is incorrect by submitting a written request. These steps are simplified by the Federal Trade Commission’s dispute letter example. What information to include in the letter is specified in the letter, which ranges from providing facts to requesting that the error be deleted or rectified
  • Attach copies that back up your claim, avoid sending originals, you should always keep them for your personal record.
  • To ensure that your letter is delivered, send it certified mail with the “return receipt requested.” Keep the receipt from the post office.
  • Ensure that you keep copies of anything you transmit.

Where to mail your credit report dispute letter

Mail your credit report dispute letter to the credit reporting bureaus and the lenders that provided the incorrect information about you.

Step 4 – Wait For The Results Of Your Credit Report Dispute

If you are correct, the lender that added the discrepancy must contact the three main credit bureaus so that they can amend the information in your credit reports.

An Unsuccessful Credit Report Dispute

If the credit bureau or the company that provided the information (the lender) determines that your claim is frivolous, they may choose not to investigate it. However, they must notify you in writing within five days if they have decided not to investigate your complaint.

Step 5 – After The Investigation Is Completed, Follow Up

When the investigation is finished, here’s what you can expect:

  • The credit bureau’s written report on the investigation.
  • If your credit report has been altered, you will get a free copy of it.

Is there anything you can do about those who have seen your inaccurate information? According to the FTC, you can contact credit bureaus to alert them of the revisions. Included are:

  • Anyone who has received your credit report in the last six months should be notified.
  • Anyone who has received your credit report in the last two years should be sent the updated version.

But what if your issue isn’t resolved by the investigation? If the furnisher continues to report the inaccuracy, you can ask the credit agencies to insert a note in your credit file that explains your side of the dispute, which will appear on future credit reports. You may generally request a copy of the statement from the credit bureau for a charge, and it will be sent to anybody who has recently gotten a copy of your report.

You can also submit a complaint with the Consumer Financial Protection Bureau if you think you were handled unfairly or if a valid error stays on your credit report. The CFPB also referred to as The Consumer Financial Protection Bureau is obligated to transmit your complaint to the firm with whom you have a problem. Within 15 days, you should receive a response from the Consumer Financial Protection Bureau.

When a dispute is settled, how long does it take for an error on your credit report to be corrected? After completing their inquiry, credit bureaus have five business days to notify you of the results.

The VerdictThe procedure of disputing a credit report error is time-consuming. Being organized, disciplined, persistent, and professional is essential. It may be worthwhile to put in the effort. Correcting credit report mistakes might help you improve your credit score and save money on loans and credit.

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