According to the Federal Trade Commission, around 20% of people have errors on their report that could affect their credit score. There’s a one in five chance that errors on your report are dragging your score down unfairly—which can end up costing you thousands of dollars. Luckily, you have the right to review your credit reports and challenge inaccurate items. Here’s how to get something off your credit report.
How to Challenge an Inaccurate Item on Your Credit Report
Your right to a free and accurate credit report is protected by the Fair Credit Reporting Act. Under the Act, if you challenge an item on your credit report and the creditor or credit reporting agency can’t verify the item’s accuracy, the act requires the unverified item be confirmed or removed from your credit report.
The Act gives bureaus and data furnishers 30 days to investigate and inform the consumer of their findings. That time can extend to 45 days under certain circumstances. The actual timeframe depends on many factors, including postal mail timing.
It’s not always as simple as it sounds, though. Check out the tips and information below to better understand how errors get on your credit report and what to do about them.
How Credit Report Errors Occur
Credit report errors can occur for a number of reasons. Here are some common ones:
- Mixed files. If someone with the same name or a similar name applies for credit, a piece of their file can become mixed with your file. A consumer with a common name such as “John A. Smith,” for example, might see his file mixed with a John B. Smith or a John A. Smith, Jr.
- Identity theft. If someone has stolen your Social Security number, they can open a new account in your name. This information appears on your credit report and can be particularly difficult to remove.
- Furnisher errors. Furnishers are banks, debt collectors, and others that report the information that shows up on your credit report. A clerical error or data issue with the furnisher can mean an error getting passed on to your credit report.
- Re-aging of old debts. Certain debts are supposed to age off your credit report within a certain amount of time. Re-aging can occur when a debt is sold to a third-party collector and the start date on the debt’s clock is muddied and appears to be a new debt. It may even appear twice on the report from the original debtor and the debt collector. This can cause your credit to take a hit for much longer than it should.
Accurate Negative Items on Your Credit Report
If the negative information is accurate, you can’t dispute it. There are a few different strategies you can try to get the information removed, though.
- Send a “pay for delete” letter. You can try requesting that a creditor remove negative reporting in return for full payment.
- Make a goodwill deletion request. If you have had a positive credit history in general, you can ask a creditor to consider that and not report negative information this time.
- Wait out the statute of limitations. Negative information won’t be on your credit report forever. As time passes, the effect of negative items will lessen, until the items fall off your credit report completely—generally after seven years.
How to Challenge a Derogatory Mark on Your Credit Report: A Step-by-Step Guide
Challenging inaccurate items on your credit report can take a bit of time. But it can be a way to help improve your credit score, which comes with potential positive impact across your life. You can either do this on your own or hire a credit repair company to manage the process for you.
1. Review Your Reports for Errors
Regularly reviewing your credit reports is one of the foundations of financial health. You can get a free copy of your credit reports from each of the credit reporting agencies once a year at AnnualCreditReport.com. Due to COVID-19, you can get a copy once a week through April 2021.
You can also pay for copies at other times. Some credit monitoring or repair services, for example, provide ongoing access to your credit reports. Track It from ExtraCredit shows you 28 of your FICO® scores and your credit reports from the three major credit reporting agencies.
Get copies for each of the major credit bureaus. An error can exist on one report and not on the other two, and you never know which credit report a lender will use to make a lending decision.
Go through every section of your credit reports. If you see any accounts you don’t recognize or late payments you think were on time, highlight them.
2. Create a List of Errors
You must challenge each item separately with the credit bureau that issued the report. You can’t make a blanket challenge for everything wrong on one report. Say, for example, you have two collection accounts you want to challenge on the same credit report. You have to file two separate challenges.
If the items needing verification are for the same account—two late payments on your mortgage, for example—you only need to file one challenge to request verification of the late payments. You do need to specify that you want both of the late payments removed, however.
When you finish reviewing your credit reports, take stock of all the items you want to challenge. This can help you decide if you want to handle credit repair yourself or work with a service.
3. Gather Supporting Documentation
Once you know what you need to challenge, you’ll need to gather documentation to support your claim that the items are inaccurate. The more evidence you have, the stronger your case will be.
In some instances, it may be hard to determine what kinds of evidence are needed. For example, an identity theft victim may not know what they need to provide to show they didn’t open an account. If you have reason to believe you were the victim of identity theft—warning signs include mysterious addresses and accounts you never signed up for—
4. Write a Credit Challenge Letter
A credit challenge letter is a formal request to the credit bureau to investigate an inaccurate item. Typically, the letter should include a description of that item, a brief statement of why you believe it’s inaccurate, and a request to remove or correct the item.
Attach any documents you gathered that help demonstrate the item is inaccurate. You may also want to attach a copy of your credit report with the item circled. Never send original copies, though, as you might not get them back.
5. Challenge with the Lender
Negative information is on your credit report because a creditor sent the information to the credit bureaus. You can contact your lender directly and challenge the item with them as well. They are required to investigate, just like the credit bureaus. It may be helpful to submit a dispute with the lender with your supporting documentation first before challenging with the credit bureaus.
6. Work with a Credit Repair Agency
If you’re stressed about tackling this process yourself—or if you found a lot of inaccuracies and simply don’t have time to research, write, and follow up on all those letters—you can work with a reputable credit repair agency.
Credit repair services such as Lexington Law Firm and CreditRepair.com bring experience to this process. They can also tackle it full-time on your behalf, which isn’t usually true for individuals trying to navigate the process on their own.
7. Continue Monitoring Your Credit
Cleaning your credit up once doesn’t mean it stays free of errors forever. Make sure you have a way to follow up with your credit report to ensure the inaccurate negative information was properly removed. Then, keep an eye on your credit so you know if future errors are impacting it.
How ExtraCredit Helps with Credit Monitoring
- Track It allows you to review your credit reports.
- Guard It alerts you to new inquiries and accounts opened in your name to help you identify and prevent identity theft.
- Restore It offers an exclusive discount to one of the leaders in credit repair.
Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C. Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.