It may have been linked to a pandemic, but consumers who checked their credit reports last year have apparently found a lot of things that look wrong. Complaints to the Consumer Financial Protection Bureau over credit reports jumped 86% from March to July 2020, following complaints about accuracy, according to a US Public Interest Research Group report, a rights organization.
Credit report errors may have crept in if card issuers or lenders made temporary pandemic-related changes to your repayment terms. These mistakes can hurt your credit score, which affects your ability to qualify for credit cards and loans and your interest rates.
The Fair Credit Reporting Act, a federal law passed in 1970, gives you the right to challenge incorrect or inaccurate information that you might find on your credit report. Here’s how to dispute a credit report error.
What is the credit dispute process?
According to the Federal Trade Commission, disputing a credit report error with a credit bureau is a six-step process:
- Identify. You look at your credit report and find an error.
- Contestation. You initiate a dispute with the credit bureau and provide supporting documents.
- Investigate. The credit bureau will investigate your dispute within 30 days.
- Decide. The credit bureau decides if your report contains an error based on your documentation and information from the data provider, such as a creditor or lender.
- To warn. You will be informed of the result within five days of the decision.
- New report. If your credit report is corrected, you can ask the credit bureau to send updated reports to employers in the past two years and to others in the past six months who have accessed inaccurate reports.
1. Examine your credit reports to identify errors
Finding problems with your credit reports is the first step in resolving them. You can get free weekly online access to your reports through April 2022 at AnnualCreditReport.com and should check them at least once a year, but more frequently in certain situations.
When to check your credit reports more often: If you plan to apply for a loan soon or have a high risk of identity theft. The latter may include being the victim of fraud or a data breach.
“Make sure you review the reports from the three credit bureaus; each may contain slightly different information, ”says Freddie Huynh, vice president of data optimization at Freedom Financial Network, a debt management solutions company.
What’s Worth Correcting About Your Credit Report? When reviewing your credit reports, look for these common credit report errors:
- Incorrect identifying information, such as your name, address, date of birth, phone number, or social security number.
- Accounts that do not belong to you, including fraudulent accounts, collection accounts, or accounts owned by someone with the same or a similar name.
- Open accounts reported as closed, and vice versa.
- Accounts that show you as an owner instead of an authorized user.
- Accounts that are incorrectly displayed as overdue or overdue, but are up to date as part of COVID-19 relief programs.
- Duplicate accounts.
- Payment default date, account opening date or last incorrect payment date.
- Incorrect credit balances or limits.
- Credit inquiries that you did not authorize.
- Public documents that don’t belong to you, such as bankruptcy.
Sometimes, if a mistake has to be challenged, it will be a matter of judgment. You may not want to correct an address that is wrong with just one letter, but a seriously wrong address could indicate fraud and needs to be corrected, says Gerri Detweiler, director of education for Nav, which connects small companies with financing solutions.
Likewise, a misspelled name may not be worth correcting, but could put you at risk for bigger issues with your credit report. Accounts that are not yours could end up being added to your credit report, according to the FTC.
However, an unauthorized credit check may not be worth looking for, Detweiler says.
“Inquiries only make up about 10% of your score, and even then, they don’t have as much of an impact as most people think,” she says. “This is not a major factor that is really worth worrying about.”
Focus on correcting the mistakes that can make a big difference in your credit score, says Detweiler. “If it shows you were late and you weren’t, it’s definitely worth challenging,” she says.
Identity theft occurs when someone steals your personal information to commit fraud, such as applying for credit or making unauthorized purchases.
Report identity theft to the FTC online at IdentityTheft.gov or by phone at 877-438-4338. You will explain what happened and get a recovery plan which can be updated as needed.
If you call, however, you won’t receive an Identity Theft Report, which can help you prove to businesses that someone stole your identity and help you troubleshoot issues caused by the incident.
2. Prepare to dispute the error
You will need to dispute the error with the credit bureau that created the report and the company that provided the information, called a data provider.
If an error appears on two of the three reports – say, Equifax and Experian but not TransUnion – you should dispute the errors with Equifax and Experian.
Prepare to back up your claim that the report is wrong with copies of these documents:
- Identify documents with your correct name and address, such as a driver’s license, birth certificate, or utility bill.
- Current bank statements with information such as balance, credit limit, payment status, and account status (open or closed).
- Canceled checks.
- Student loan disability letters.
- Court documents, such as bankruptcy schedules.
- Relief program agreements.
- Letters from a lender indicating an account have been corrected.
- Proof that an account is the result of identity theft.
- Correction letters from a lender.
3. Dispute the mistake with the credit bureaus
The fastest and easiest way to file a credit dispute with the bureaus is online, Huynh says, but you can also do it by mail or over the phone.
Whichever way you file, use the CFPB templates for letters of dispute to credit Company. You can also include a copy of your credit report with the inaccurate or incomplete item marked or circled, and your letter will explain why it is wrong.
Filing a dispute is free, but be sure to follow the process for each credit reporting agency.
Filing a dispute with Equifax
In line: You can file a dispute on the Equifax website if you have a myEquifax account or once you have created one. Check the status of your dispute through the account.
Mail: Submit your information to Equifax Information Services LLC, PO Box 740256, Atlanta, GA 30374-0256.
Telephone: Call 866-349-5191 between 8 a.m. and midnight Eastern Time, Monday through Sunday.
Filing a dispute with Experian
Mail: Download, print, complete and post this protest form at Experian, PO Box 4500, Allen, TX 75013.
Telephone: Call the number listed on your Experian credit report to initiate a dispute over the phone.
Filing a dispute with TransUnion
In line: Start a TransUnion account or log in to file or check the status of a credit dispute.
Mail: You will need to provide as many details as possible to TransUnion to resolve your dispute by mail. Submit your name, address, social security number, date of birth, name of data provider, reason for your dispute, and any corrections to personal information, such as address or phone number.
If possible, include the partial account number of the disputed item from your credit report and your TransUnion file number. Mail your documents to TransUnion Consumer Solutions, PO Box 2000, Chester, PA 19016-2000.
Telephone: Call 833-395-6941 between 8 a.m. and 11 p.m. Eastern Time, Monday through Friday.
4. Contact the data provider
You can correct an error with the credit bureau, but until you fix it with the data provider, the error will still appear on your credit report. This is because the data provider is the source, and the credit bureau only reports this information.
If you correct your name with the credit reporting agency but not the data provider, for example, your credit report will continue to show the wrong name.
Contact the data provider to correct the information. The CFPB offers other orientations and a sample letter of dispute.
5. Wait and review the responses
Typically, credit bureaus and data providers will respond to your dispute within 30 days, according to the CFPB. Note that if you provide additional information relating to your dispute during the investigation, you may wait up to 45 days for a response.
When a credit bureau completes an investigation, it must notify you of the results within five business days. The credit bureau might decide to:
- Do not make any changes to your credit report.
- Update your credit report.
- Remove the information from your credit report.
You will receive a free copy of your updated report to verify the correction. This process will be repeated as errors must be disputed separately with each credit bureau.
If you are not satisfied with the result
- Dispute the error again: If you have additional information, submit it to the credit bureau or data provider along with a letter explaining the attachment. Ask the agency to send you the documents it used for the decision and escalate the dispute if necessary.
- Report to the credit bureau: File a complaint with the FTC and the CFPB if the credit reporting agency is not providing adequate assistance or taking your dispute seriously.
- Write a dispute statement: “If the dispute has been resolved but the consumer still does not agree, the consumer can leave a statement on the credit report stating that they do not agree with the information in the report,” he said. declared Huynh. Your statement should tell your side of the story in 100 words, but creditors are not sure to take it into account.
6. Examine your new report
You will receive an updated copy of your credit report from the credit bureau once your dispute has been resolved. Verify that the error does not appear on the report.
Continue to monitor your credit reports for errors and make sure old errors don’t reappear.