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Like baseball, apple pie and binge-watching TV shows on Netflix, finding errors on your credit report has become a national pastime — it’s just a pastime that no one really enjoys.
According to a report from the Federal Trade Commission, one in five Americans have errors hiding on their credit reports. Seems like a large number? It is, considering how important your credit is to buying a house, applying for a credit card and even just getting a cellphone.
Credit report errors can occur for a number of reasons. The National Consumer Law Center identified four common causes in a 2009 report on the topic.
The three major credit reporting agencies all have a dispute system in place to allow consumers to get incorrect information removed from their credit reports. But first, you have to know an error exists. You can get copies of your free annual credit reports at AnnualCreditReport.com. You can also get your free credit report summary every month on Credit.com to see how any errors might be impacting your scores.
One of your biggest obstacles is getting your credit report accurate with each of the credit bureaus. Why’s that? Each of your credit reports from the three major credit reporting agencies can contain different errors. That’s because different furnishers report to different credit bureaus. An incorrect item may only appear on one or two of your credit reports because the bank or lender only reports to those bureaus, and not all three. It can be difficult to sort out which bureaus have inaccurate info in the first place.
The dispute process is also separate for each credit bureau. For example, you could find the same error on all three credit reports — a collection account for a cellphone bill that isn’t yours, let’s say. You have to dispute that item with each of the major credit reporting agencies. In some cases, one bureau may remove the item, siding with you in the dispute process. But wait — the other two bureaus aren’t removing the item — a very frustrating experience for someone who’s applying for a mortgage, for example, and needs an accurate report from each bureau, not just one.
Each credit bureau has an online process for disputing errors, though some consumers opt to write dispute letters and send them via certified mail, along with any supporting documents. You also can dispute inaccurate information directly with the “data furnishers” — your credit card company, for example.
The credit bureaus generally must investigate or remove the error within 30 days, unless they believe the dispute to be frivolous.
[Offer: If you don’t want to go it alone, you can hire companies – like our partner Lexington Law – to manage the credit repair process for you. Learn more about them here.
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