We’re sorry to break it to you, but If you’ve got an error of your credit report, it’s likely to stay there until you formally dispute it. Formally disputing an error involves writing a letter to the credit bureau reporting the inaccuracy. Sounds like a piece of cake? Not always. Errors are not created equal and, unless you’re specific and provide evidence for your claim, you risk having your dispute denied. Here’s what you should know if you’re getting ready to send a credit repair letter.
Do I Really Need to Worry About Errors on My Credit Report?
Yes, finding errors on your credit report isn’t as uncommon as you might think. A study issued by the Federal Trade Commission in 2012 found that one in five consumers had an error corrected by a credit reporting agency after disputing it. Worse still, in 2015, the FTC issued a follow-up study on credit report accuracy, which found “most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate.”
Obviously, you want to take charge of your credit to keep your finances in check. But before we explain how to draft a letter disputing credit report errors, it’s important to understand the role credit plays in your day-to-day life.
How Can an Error on My Credit Report Affect Me?
An error on your credit report, such as a missed payment or default on student loan debt, can seriously damage your score, making it harder to secure an affordable line of credit. An auto lender may give you a higher rate, for example, while a landlord could turn you down for a rental apartment.
With this in mind, it’s wise to get a copy of your credit report — you can pull your credit reports for free each year at AnnualCreditReport.com and see a free credit report summary for free on Credit.com — and go through it with a fine-toothed comb to spot any issues.
How Can I Check my Credit Report?
As with any financial paperwork, you’ll want to make sure the basic information — such as your name, address, birthdate and Social Security number — is correct. (Also ensure it’s complete and up to date.) Beyond that, you’ll want to verify each creditor’s name and debt listed on the report. Spot something unfamiliar? Jot it down, and give that creditor a call to get to the bottom of it. Some lenders sell loans or transfer them to another servicer, so there’s always a chance that you either ignored the notification or never received one. Either way, you’ll want to find out.
You’ll also want to look for any signs of identity theft. Mysterious accounts opened in your name, for example, are cause for concern. (If you believe you’ve been a victim of identity theft, it’s a good idea to act right away. You can find a full list of steps to take if your identity has been compromised.)
Mixed files — that is, when someone with the same name or a similar name applies for credit, and their file becomes mixed with yours — are another common occurrence, according a 2009 report by the National Consumer Law Center.
How Do I Write a Credit Report Dispute Letter?
If you’ve reviewed your credit report, spoken with each furnisher and still believe that an item on your report is inaccurate, here’s what to do, according to John Heath, a consumer attorney with Lexington Law, a Credit.com partner.
Include your name, current address and a reference line, titled “Re:” Here, you’ll list the name of the creditor and the account number on your credit report. Be sure to truncate that number to the last four or five digits for security, Heath advises. (Usually the bureaus want your Social Security number, but Heath recommends only including the last four digits.)
After your salutation, “start off by letting the bureau know you are challenging [a certain] item and give the reason why — it’s not yours, it’s inaccurate — and ask them to verify that it should be on your report,” Heath says. “Include language to the effect of, ‘I expect you to perform your investigation within the statutory timeframe of 30 days pursuant to the Fair Credit Reporting Act.’” Asked why this is crucial to mention, Heath says, “I think it’s important so that the person reading the letter understands you are aware of their obligations under the law and that you expect it to be done within [30 days].”
You can leave a telephone number for them to contact you, “but that rarely happens,” says Health. “Usually the letter will trigger an investigation, and then the bureau will send you results.”
What Should I Leave Out of My Credit Repair Letter?
In terms of what not to include, Heath says vitriol or “demanding speech that is unprofessional” is completely off-limits. “Don’t make threats that you can’t back up,” such as a lawsuit, and aim to make it a “polite, business-like communication.” Avoid name-calling, too.
See a sample letter for reference.
What Should I Send With My Credit Report Dispute Letter?
Whether you choose to send your dispute by mail or online, you’ll need to include copies of any supporting documentation, such as call logs, receipts, and statements. (If you take the digital route, you’ll receive an email notification.)
From there, you’ll just have to wait — 30 days, to be exact. That’s how much time the credit agency has to get back to you with a response, per the Fair Credit Reporting Act Heath mentioned, although most disputes are processed quicker than that, sometimes in two weeks. (Note: Some disputes can, by law, take up to 45 days.)
How Will I Know My Credit Repair Letter Worked?
If the statement is deleted, you’ll know your hard work paid off. If not, you have a couple of options. First, you can add a short written statement to your credit report, which will appear next to the item you disputed (think of this as a flag). Experian offers some standard comments addressing the most common issues. Consumers can also add multiple statements, although if they have more than 10, they’ll need to call the agency.
The second option is to escalate your dispute and send a letter to the agency explaining why you feel the conclusion is wrong. (You can copy the Better Business Bureau, your state attorney general, and the Consumer Financial Protection Bureau while you’re at it.) Be sure to keep records of your dispute, including copies of credit reports, correspondence and print-outs of emails. Keep them in a file where you can readily find it.
If your attempts to remove the dispute don’t work, you can also hire a reputable credit repair company to help. A good credit repair company will never promise results and won’t take payment until they’ve rendered services on your behalf.
This article has been updated. It was originally published on July 12, 2016.
Credit report mistakes can lead to disqualification for mortgages and car loans, as well as increased insurance premiums and interest rates. In some cases, those mistakes can even prevent you from getting a job.
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79% of consumers who disputed credit report errors were successful in removing them
Lexington Law offers services to dispute unfair negative items. Call for a FREE consultation:Call 1.844.346.3403