Errors on credit reports are surprisingly common.
A few years ago, the Federal Trade Commission completed a decade-long study which found that more than 20% of consumers had at least one error on a credit report significant enough to potentially hurt their credit score.
If you’re looking to buy a home, get a loan, or apply for a credit card in the near-future, it’s important that your credit report be error free. An error-ridden credit report can lower your credit score. A lower credit score can make you look like a riskier borrower than you really are, causing lenders to offer you less favorable rates, or, in some cases, to reject your application entirely.
The three major credit reporting bureaus, Equifax, Experian and Transunion, do their best to make sure the information on a credit report is accurate. But each of the credit reporting bureau maintains active credit files on more than 200 million Americans. With more than a billion data points to update each month, mistakes happen.
Get a Copy of Your Credit Report
By law, you’re entitled to one free copy per year from Equifax, Experian, and TransUnion. If you haven’t done so already, get copies of your credit reports.
(If you want some help reading and understanding your report, check out our previous post this series.)
Understand What You Can Dispute
It’s a free country, so technically, there’s nothing stopping you from sending a sternly worded letter to a credit bureau about anything you’d like.
But generally, credit reporting bureaus will investigate and resolve disputed items that fall into one of two categories:
Information That’s Inaccurate.
As we mentioned above, mistakes happen. Maybe you notice that your name is spelled wrong, or that your report shows an incorrect middle name or initial. Perhaps your credit report lists a past address in a city in which never lived. Or you see an account you paid off listed as unpaid. Or your report still shows that credit card account you shared with your ex, but for which you are no longer responsible.
Whatever the issue is, if you see something on your credit report that isn’t true, you should dispute that information. Inaccurate negative information is probably hiring your credit score. And though inaccurate personal information (like a wrong address) probably isn’t hurting your score, it could be an indication of potential identity fraud.
Information That’s Out-of-Date.
By law, the credit bureaus must remove most negative information from your credit report after seven years. (Bankruptcies can stay on your credit report up to ten years.) If you spot negative information on your credit report older than is allowed, you can ask to have it removed.
Take It Up With the Credit Reporting Bureaus First
Remember: the error you’ve spotted is on your credit report. That means that ultimately, you need the companies that maintain your credit reports to fix your credit reports.
You may be more comfortable talking to your lender or credit card company directly, but you’ll save time and resolve the error faster by contacting the credit reporting bureau first.
For example, let’s say you spotted an error concerning your Chase credit card account. You may be tempted to call Chase to complain about it. Like the credit reporting bureaus themselves, credit card companies that furnish information to the credit reporting bureaus are also obligated to address and investigate errors.
But in this case, your credit card company can only help remedy the situation if the error is the credit card company’s fault. And there are all sorts of reasons that a mistake might show up on your credit report. Chase sent the wrong information to the credit reporting bureau is just one of them.
The only exception to this rule is if the error on your credit report concerns public records or court proceedings. If your credit report is showing, say, an unpaid tax lien, get in touch with the appropriate municipality before you contact the credit reporting bureau. Either the public record has been recorded erroneously (in which case, you’ll need to get the official legal record corrected before the credit reporting bureau can update your credit report), or the public records are right but the credit reporting bureau has the wrong information (in which case, you’ll want copies of the documents with the right information to include with your dispute).
Decide How You Want to Contact the Credit Reporting Bureau
All three of the credit reporting bureaus will now process disputes online. Here at Morty, we’re fans of the online route for most things, and that includes disputing most credit reporting errors.
Submitting a dispute online is easy and quick, and you can track the progress of your dispute in basically real time. Here are links to the online dispute portals for all three credit bureaus:
That said, you can also dispute errors on your credit report by mailing a letter to the appropriate credit reporting bureau.
Reporting an error through the mail may take a bit longer to process. But if having a paper trail is important, or if you have a complicated error to dispute, you can send a letter the old-fashioned way.
Equifax
P.O. Box 740256
Atlanta, GA 30374-0256
Experian
P.O. Box 9701
Allen, TX 75013
TransUnion
P.O. Box 2000
Chester, PA 19016
If you mail your dispute letter, be sure to send the documents certified mail to verify your correspondence. It’s inexpensive, and you’ll have proof that you sent a dispute on a particular date, should you need that later.
And remember: mail copies of any supporting documents, not originals.
What to Include With Your Dispute
Your letter about your dispute doesn’t need to be long or fancy.
The FTC has some sample language here that you can use, if writing is not your forte. But basically, your letter only needs to cover:
- What the error is
- What you want the credit reporting bureau to do about it
- Any supporting documents or evidence (if you have it)
Remember, each of the credit reporting bureaus receives millions of disputes each month. When composing your letter, the goal is short, sweet, and to the point.
When I reviewed my credit report, I noticed that my name was spelled incorrectly. My middle name is Ann, not Anne. I’ve attached a copy of my driver’s license for your review.
My credit report currently includes negative information which is more than seven years old. Please remove the following accounts:
ABC Loans Account # 45678910
XYZ Car Loans #123454321
I see that my credit report currently shows that my 123 Capital account as delinquent. That account was brought up to date in December of 2016, and remains open. Please update my credit report to reflect this.
Fair warning: the online dispute reporting forms may limit you to a few hundred characters.
What Happens after You Submit a Dispute
Once you submit a dispute, the credit reporting bureau will begin an investigation. If you’re reporting an error about your personal information (say, a name or address), the credit reporting bureau may be able to resolve the issue themselves quickly.
Otherwise, the credit reporting bureau will get in touch with the furnisher of the information in question — that is, the lender or company that provided the information in the first place. The furnisher will investigate on their end, and let the credit reporting bureau know what they find.
If the company that provided the information to the credit reporting bureau can verify that your dispute is correct, the credit reporting bureau will update your credit report.
Either way, the credit reporting bureau will let you know the results of investigating your dispute, usually within 30-45 days.
If your credit report updates as a result of your dispute, you may request another free copy to see that the changes have been made.
If Disputing An Error Doesn’t Go Your Way
So what happens if you don’t get the response you were hoping for from the credit reporting bureau?
You might consider reporting the issue to the Consumer Financial Protection Bureau, which will work with you and the credit reporting agency to resolve your issues.
Credit reporting bureaus allow consumers to include comments on their credit reports — essentially, you can write a few sentences explaining the situation for folks who might be reviewing your credit report. The credit reporting bureau will include your comments along with your credit report to lenders and others who may be reviewing your credit. Added comments won’t change your credit score, but could provide some context for your situation to, say, an underwriter, while a dispute is in progress.
If your first dispute was denied because you needed additional evidence, you can resubmit your dispute with more documentation. (If you submit a dispute more than once, be careful to include what’s new about the updated dispute in your note or letter: credit reporting bureaus may reject a repeated dispute as frivolous if it’s not clear that you’re providing new information.
