Found an error on your credit report? Don’t freak out. Federal law permits you to dispute credit report errors with the credit bureau in question — and, chances are, there’s a “how to” section right there on the report containing the error. If not, you can visit the credit bureau’s website to get the process started. The major credit reporting agencies — Equifax, Experian and TransUnion — let you dispute an error online. You should even be able to upload supporting documentation when you file via their dispute portal. (Note: You can also send the bureaus a written letter. More on this in a few.) Once you formally dispute a line item, the credit bureau will have 30 to 45 days to investigate. If they determine the information is, in fact, an error — or they can’t verify it at all — it will have to be removed. Of course, not all credit report disputes go smoothly. Here’s everything you need to know in order to get inaccurate information off of your credit file.
How Common Are Credit Report Errors?
Believe it or not, finding an error on your credit report isn’t an uncommon experience. In fact, a 2012 study from the Federal Trade Commission found that one in five Americans had an error on their credit reports. While some of those errors are innocuous — a misspelled name, perhaps, or an old address — others can kill your credit score, potentially costing you tens of thousands of dollars over your lifetime in higher interest rates, upfront deposits and increased insurance premiums. (You can learn how credit impacts your day-to-day life.)
Fortunately for consumers, the law is on their side. Credit bureaus have a responsibility to provide accurate information about consumers and are required to have a dispute process so consumers can get their credit reports fixed. Under the Fair Credit Reporting Act, which the FTC enforces, if you dispute an item on your credit report and the credit reporting agency cannot verify the item’s accuracy or if the item is proven to be inaccurate, the item must be removed from your credit report 30 days after the dispute has been received by the bureau.
How Credit Report Errors Occur
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.
- Mixed Files. If someone with the same name or a similar name applies for credit, a piece of their file may become mixed with yours. A consumer with a common name like “John A. Smith,” for example, could 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, for example, they could open a new account in your name. This information could appear on your credit report and can be especially difficult to remove.
- Furnisher Errors. There are three big players when it comes to credit report accuracy: credit bureaus, consumers and “data furnishers.” That last one is important — it’s the banks, lenders, debt collectors, and rental companies that supply (aka “furnish”) the data that appears on your credit reports to the credit bureaus. Often, a furnisher can report something inaccurately, like a missed payment or a collection account that actually belongs to someone else.
- Re-Aging of Old Debts. Certain debts have a ticking clock of sorts when it comes to your credit report. A collection account, for example, is supposed to age off of your credit report after seven years and 180 days from when it was first delinquent. (You can see our guide to the statutes of limitations on debts in each state across the U.S. here.) However, sometimes “re-aging” occurs, often when a debt is sold to a third-party collector and the start date on that clock is muddied, causing your credit to take a hit much longer than it should under the law.
How to Find Out If You Have Derogatory Marks on Your Credit Report
Before you can fix the problem, you need to know what the problem is. You can either do this on your own, or hire a credit repair company to manage the process for you. Read this to learn how credit repair works.
You can get free copies of your credit reports once a year at AnnualCreditReport.com. Be sure to pull your reports from each of the major credit reporting agencies — again, that’s Experian, Equifax and TransUnion. An error can exist on one report and not on the other two, and you never know which credit report will be used in a lending decision, so it’s important to make sure all three reports are accurate.
Go through every section of each of your credit reports with a fine-toothed comb — there will likely be a lot of information there. If you see any accounts you don’t recognize or late payments you think were on time, highlight them. You’ll need to dispute each of those separately with the credit bureau who issued that report. Even if the same error appears on all three of your credit reports, you’ll need to file three separate disputes over the item.
You can’t make a blanket dispute claim for everything that’s wrong on your report. Say, for example, that you have two collection accounts you want to dispute on the same credit report — you’ll need to file two separate disputes. However, if the disputes are for the same account — two late payments on your mortgage, for example — you only need to file one dispute, but you need to specify that you want both of the late payments removed. When you finish your credit report investigation, take stock of all the disputes you need to file. Depending on the number of inaccuracies on your credit report, the dispute process can be cumbersome.
Next up: How to actually get the items removed from your credit.
Steps to Remove Negative Items From Your Credit
As we mentioned earlier, the dispute process can be done online or via the mail with each of the credit reporting agencies. You are now able to upload supporting documentation to each of the credit bureaus to challenge an error, but you can also include that information in your snail-mail letter if you decide to do so.
If sending your dispute by mail…
- Write a dispute letter. (We’ll explain more on that in the next section.)
- Send it via certified mail so you can track when it was received.
- Include copies of any supporting documentation. Do not send originals!
- You will hear back from the bureau regarding your dispute via U.S. mail, possibly after the 30-day window depending on how long it takes the letter to arrive at your address.
If sending your dispute online via one of the credit bureau portals…
- You don’t need to write a formal letter, but you will need explain what the error is and where it appears on your report.
- You can submit it instantly to the bureau and can check the progress of your dispute online via a dispute portal.
- The bureaus allow you to upload supporting documentation, which some people may prefer for security reasons versus sending sensitive information through the mail.
- You will be notified of the results via email.
When filing your dispute, make sure to clearly identify each mistake, articulate the facts and explain your reason for disputing the information, as the Consumer Financial Protection Bureau notes on its site. You may consider enclosing a copy of your credit report with your claim and sending your letter of dispute by certified mail. Whatever you do, do not include the original copies of the documents you use to support your claim, the CFPB warns. The last thing you want is to lose your evidence.
Remember, the more evidence you have, the better your case may be. In some instances, it can 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 in their name. After all, they never signed up for it! 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 — be sure to read our story for information on how to fight back.
Unfortunately, this section is where many people opt to hit the “easy button” on their credit dispute process and simply give up. That’s understandable, but you have options. You can hire a credit repair company to represent you on your behalf to the credit bureaus for a fee. A good credit repair company will explain exactly what it can and cannot do on your behalf, will never guarantee a “100-point rise in your credit score” (this is illegal, in fact), and will never ask for payment until after you’ve received services from them. Credit repair companies can be especially helpful if you have many errors on your credit report or have situations like a major identity theft issue or a divorce decree that potentially require more explanation and expertise to dispute. Some people just don’t have the time to go through the whole dispute process and would prefer someone handle it for them instead.
How to Write an Effective Dispute Letter
If you want to take a DIY approach to credit repair, there are a few things you should remember when writing a dispute letter.
- Be clear and concise. A credit bureau is concerned about accuracy, so pinpoint exactly what is inaccurate (the date of the inaccuracy, the account in question, the lender, etc.).
- Don’t quote federal laws. Writing that you want to initiate a dispute is sufficient enough. Credit bureaus know these laws already.
- Include your return address so your results can be sent to the right place.
Here’s a sample letter you can use to write your disputes:
Jane Q. Consumer
123 Main Street
Mainstreet, USA 12345
January 30, 2016
Ref #: 000-111-2222
To Whom It May Concern:
I would like to dispute the following item on my credit report:
Wall Street Mortgage Co.
Partial account number 7890.
My credit report shows a 30-day late payment in the amount of $781.32 for April 2013. However, I was not late. I have enclosed copies of my statements for April, May and June 2013 that together clearly show my payment for April was not 30 days late.
Please correct this as soon as possible.
Jane Q. Consumer
This article was updated on May 8, 2017.
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.
Consumers have started enlisting a law firm to dispute negative items on their credit reports...and they’ve been wildly successful! Click here to learn about the strategies they use to fix their credit.
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