How to Find and Fix Credit Report Errors

CardsBull's picture
How to Find and Fix Credit Report Errors

 

Credit report inaccuracies are not uncommon - in 2016, the Consumer Financial Protection Bureau reported that the most popular customer complaint was in fact regarding inaccurate credit score reporting (23.17%). This kind of error can cost you not only points in your credit score, but also your ability to qualify for credit cards or obtain lower interest rates.

It’s never a good idea to blindly trust credit bureaus, because, after all, they are merely humans doing a very serious job which can affect the lives of many. That’s why your credit report is also your own responsibility, not just in the sense of keeping it clean by being financially responsible; it’s also important to keep an eye on it and dispute any errors you might notice.

What errors could there be on one’s credit report?

1. Personal information errors could include wrong names, addresses which shouldn’t be associated with you because you never lived at them or used them as mailing addresses, wrong Social Security Number, wrong date of birth, or inaccurate employer information. Sure, these types of errors seem non-threatening, however, they should not be ignored. Sometimes, these type of errors are linked to fraud or identity theft.

2. Account information errors usually include late payments older than seven years, accounts which don’t belong to you, loans which you never took out, or credit cards which don’t belong to you and on which you’re not a co-signer or authorized user. Of course, this is not all - in fact, there’s a lot of things that could be mistakenly reported on your credit report: closed account reported as open and vice versa, incorrect balance, account listed as closed by lender, when it was in fact closed by you, etc. So much potential misinformation about your creditworthiness - you really don’t want to miss it and have it reach someone who has your future in their hands.

3. Derogatory mark errors are not something you want to see on your credit report. They refer to errors regarding reported bankruptcies, foreclosures, collections, tax liens, and civil judgments. If you’ve paid off your collections account, it shouldn’t be showing up as unpaid on your report, and your account discharged in bankruptcy shouldn’t be showing up as active!

4. Fraudulent accounts on your report are obviously quite alarming. If your identity was stolen in order to open a credit card or take out a loan, it’s safe to assume that the person did it without planning to pay it off. You don’t want to be punished for these delinquencies, because they’re not yours.

How to start?

No one wants to deal with credit bureaus or disputing errors, especially due to our already busy and stressed life. Only a couple of years ago I shied away from checking my credit reports because I thought that I am immune to errors, and that if there happened to be errors on my credit report, they wouldn’t affect me much. This is a very wrong point of view, because the harsh truth is, they can affect you in more ways than one.

The first thing you need to do is obtain your free credit reports that you’re legally entitled to once annually through AnnualCreditReport.com. This is the only official website offering this service, and you should never pay in order to get a hold of your credit report. Instead of requesting reports from all three credit bureaus at the same time, do it every 3 to 4 months from each agency - that way you’ll get a better snapshot of your standing, rather than looking into all three of them once each year.

Apart from believing that your report contains misinformation due to identity theft, you may also be entitled to an additional free credit report if you’ve been denied credit because of information on your credit report, if you’re unemployed and plan to apply for jobs in the next 60 days, or if you receive public welfare assistance.

After you obtain your credit report, go over everything that was mentioned above. In the first section, look for personal information errors, keep an eye on aliases (all different names that you used, including middle and maiden names). Then review creditor information, as in, all your credit accounts, lender information, balances and statuses. This is followed by information on accounts sent to collections, as well as public records, such as liens, bankruptcies, or civil judgments. Finally, your credit report should state all the hard inquiries - if an unfamiliar name has tried to pull your credit information, give them a call and check to see why your report was reviewed.

How do I dispute credit report errors?

You can dispute errors with all three credit bureaus, Transunion, Equifax, and Experian, by mail, phone, or online.

Another option is to dispute with data furnishers (your creditor reporting to the bureaus), however, it might not be the best idea. Sure, it might be faster and easier, but if you bypass the dispute system of credit bureaus, if your creditor fails to correct the error it might be difficult to get it resolved. Under the Fair Credit Reporting Act, disputes have to be sent to credit bureaus in order to be investigated. That’s why it’s much safer to go through credit bureaus, regardless of how harmless you think the error might be.

Many people opt for disputing with credit bureaus online, because it’s the quickest, easiest, and least stressful option. This can be done through AnnualCreditReport.com, or through credit bureaus’ respective website forms: TransUnion, Equifax, and Experian. This should be straightforward, first you will be asked to simply describe your situation, verify your identity, and then you will go through your report and pinpoint the exact error which you want to dispute. A dispute will require some sort of explanation, after which you’ll be able to submit it.

It’s important to point out that online dispute systems don’t require attaching additional evidence or a longer explanation of your situation. This poses a threat of not being able to successfully sue the credit bureau, in case they fail to investigate your case and correct errors.

If you choose to go the mail route, you will need to send a letter and supporting documents to all three bureaus. It’s advised to send your letter via certified mail, and to request a return receipt as well. It is generally much better to get in contact with credit bureaus via mail or the internet, simply because it’s easier to keep track of your correspondence. If you opt for a phone dispute, you still might end up filing online or via mail anyway, especially if you’re dealing with something more complex, such as an account discharged with bankruptcy showing as active or your identity being stolen.

What shouldn’t I do?

1. Don’t panic. Errors happen, often and to many people. But that doesn’t mean that they’re incorrigible. If you’re looking over your credit report, you’re already doing something right. An error is easily taken off your credit report as long as you have a valid reason and evidence - so there’s really not much to worry about, as long as you go through credit bureaus and document every correspondence.

2. Be Patient. Unfortunately, credit bureaus do take some time to issue you an official response, usually up to 30 days, followed by a couple of weeks during which investigation takes place. This is why it’s crucial to always keep track of your credit report and credit score, because you never know at what inconvenient time an error could be attributed to you. You don’t want credit report errors keeping you from lower loan quotes or that credit card you’ve been meaning to apply for.

3. Dispute again. Errors won’t always be resolved successfully, so you might have to dispute the error again and ask the agencies to show you how they made their decision. You might be forced to escalate the dispute, or file a complaint with the Federal Trade Commission.

4. Keep evidence. If you’re stuck in a loop of sending dispute after dispute, it might mean that you have to sue the bureaus, for which you would need a very strong case. How do you build a strong case? By providing substantial evidence. That’s why it’s important to keep that return receipt we mentioned, as well as your financial paperwork.

5. Follow up. You should know by now that you can never leave your credit report unattended for too long. Even if you manage to successfully resolve the issues regarding your report, you never want to miss other errors. Also, even if you think errors have been removed, it’s always a good idea to give it another look - just to make sure.

Sure, worrying about your credit score is not the most fun thing around, but neither is being denied your dream credit card or being charged high interest on your loans. Your credit report is a huge part of your financial, professional, and personal life - it’s really not something that should be ignored. So, avoid the unnecessary headache and check your credit report!

Credit report inaccuracies are not uncommon - in 2016, the Consumer Financial Protection Bureau reported that the most popular customer complaint was in fact regarding inaccurate credit score reporting (23.17%)." data-share-imageurl="https://www.cardsbull.com/sites/default/files/pexels-photo-461077.jpeg">