What to Do About Errors on Your Credit Report

How to Handle Errors on Your Credit Report

Discovering errors on your credit report can be frustrating and potentially harmful to your financial health, but addressing them right away can help safeguard your credit score and give you a chance to succeed. 

Obtaining Your Free Credit Reports

The first step in dealing with credit report errors is knowing what’s on your report. Every year, you are entitled to one free credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion. You can request these reports online through AnnualCreditReport.com.

It’s a good idea to check all three reports because their information can differ. A creditor may report to one bureau but not the others, or one bureau might have made a mistake while the others are accurate. Reviewing all three reports gives you a full picture of your credit standing.

Once you have your reports, go through them carefully to ensure that all the information is accurate.

Reviewing Your Credit Report for Errors

As you review your credit report, there are several types of errors you might find. These mistakes can range from minor clerical issues to more serious discrepancies that affect your credit score. Some common errors to look out for include:

• Incorrect personal information: Make sure your name, address, and Social Security number are correct.

• Accounts that don’t belong to you: If there are accounts listed that you didn’t open, it could be a sign of identity theft.

• Wrong account statuses: For example, an account may be listed as delinquent when you’ve paid it off or as “open” when it’s been closed.

• Duplicate accounts: Sometimes the same account might appear more than once, making it look like you have more debt than you actually do.

• Late payments or negative marks: Check for late payments that you know were paid on time, or negative items like bankruptcies that are too old to still be on your report.

Even small errors can affect your credit score, so it’s important to address them quickly.

Gathering Documentation

If you find an error on your credit report, you’ll need documentation to prove that the information is incorrect. The type of documentation you’ll need depends on the nature of the error.

For example, if there’s a mistake regarding a missed payment, gather bank statements or payment confirmations that show the payment was made on time. If an account appears that you don’t recognize, you might need to show proof of identity theft or documents proving that you’ve never opened an account with that creditor.

Other types of documentation might include:

• Loan or mortgage statements

• Letters from creditors

• Billing statements

The more evidence you have to support your claim, the easier it will be to dispute the error.

Disputing Your Credit Report With the Bureaus

Once you’ve identified an error and gathered the necessary documentation, it’s time to file a dispute with the credit reporting agency that has the incorrect information. Each credit bureau – Equifax, Experian, and TransUnion – has an online dispute process, or you can file your dispute by mail if you prefer.

Here’s what to include in your dispute:

1. A clear explanation of the error: Be specific about what’s wrong, where you found the mistake, and why it’s incorrect.

2. Copies of your supporting documentation: Include any evidence that backs up your claim, such as payment receipts or letters from creditors. Do not send originals, as they may not be returned to you.

3. Your personal information: Make sure to include your name, address, and Social Security number so the bureau can identify you.

After filing the dispute, the credit bureau is required by law to investigate the issue within 30 days. They will contact the creditor or organization that provided the disputed information and ask them to verify its accuracy.

“Sometimes, credit bureaus will refuse to remove information on your credit report that you know is inaccurate,” FCRA attorney Jibrael S. Hindi explains. “While this can be frustrating, you can respond by filing a claim to report a violation of the Fair Credit Reporting Act, which may also entitle you to compensation for any financial losses you incurred due to that error on your report.”

Disputing the Error With the Creditor

In addition to disputing the error with the credit bureau, it’s also a good idea to contact the creditor or company that reported the incorrect information. This could be a bank, credit card company, or loan provider. Many creditors have their own dispute processes, and resolving the issue directly with them can speed up the process.

Send the creditor a dispute letter similar to the one you send to the credit bureau, outlining the error and providing your supporting documentation. Make sure to keep copies of everything you send.

If the creditor finds that the information is indeed inaccurate, they are legally required to inform all three credit bureaus so the mistake can be corrected across the board.

Tracking the Progress of Your Dispute

After filing your disputes, keep track of their progress. The credit bureau will notify you when the investigation is complete, typically within 30 to 45 days. They’ll provide you with the results of the investigation and let you know if the disputed information has been corrected or removed from your report.

If the error is corrected, request a new copy of your credit report to verify the change has been made. This updated report will reflect the removal of any inaccuracies and should positively impact your credit score.