How to Dispute Something on Your Credit Report
A credit report is a detailed document of your credit history including information such as your credit limit, open accounts, repayment history, past employers and more.
This information is important as it's used to calculate your credit score. The higher your score, the better you appear to potential creditors or service providers.
While your nosey next door neighbour won’t be able to check your credit report, it is readily available to business entities you may want to work with.
Opening a bank account, applying for a loan or mortgage, setting up an electricity provider, renting a home… all of these are common scenarios in which lenders and providers might request your credit report. This information helps them do their homework on you and make a judgement on your ability to pay back a loan.
With such big decisions riding on it, people are often surprised to learn how many errors are found in credit reports.
In fact, as many as one in five people have discovered mistakes in these documents.
Sometimes these errors are simply that - errors. However, on other times, they can reveal something much more sinister - you’re a victim of identity theft.
In this article, we’ll explore these credit report errors a little further, including:
- The most common credit report errors
- How to identify errors in them
- How to dispute your credit report
But first of all, you may be wondering...
Why are there so many errors on credit reports anyway?
We hear you, one in five people spotting errors is quite significant isn’t it? There are three main credit reporting bureaus in the US - Experian, Equifax and TransUnion. Each of them holds hundreds of millions of files with data taken from an ocean of different sources. When it comes to gathering this information, speed and volume often take priority over accuracy.
Therefore, credit report errors are very common and unfortunately, it’s your responsibility to check yours is accurate.
What are the most common credit report errors?
There are three main categories of error you’re most likely to find in your credit report.
1. Incorrect account information
With so much information passing from A to B, it’s not difficult to imagine how basic errors can happen. These usually occur either when creditors provide the incorrect information to the credit reporting agency or when the credit reporting agency makes a mistake when compiling the data at their end. Examples include incorrect credit limits, late payments or unpaid balances, all of which could be seen as negative marks against you.
2. Incorrect personal information
Your personal information can get mixed up and misrepresented in just the same way as your account information. This might look like a wrong address or an incorrect social security number.
3. Fraudulent activity
While errors in your account and personal information can potentially harm you in terms of your credit score, fraudulent activity is by far the most serious error to look out for. Perhaps you see account numbers you don’t recognise or street addresses you’ve never lived at - these signs show how someone has been opening accounts in your name so you have been a victim of identity theft.
As we mentioned, accuracy is not top of the agenda for credit reporting agencies so it’s important you know how to check the accuracy of your reports yourself.
How to check your credit report
Usually you can request one free report from each of the main credit reporting bureaus (Experian, Equifax and TransUnion) every year by visiting AnnualCreditReport.com.
Checking your credit report during Covid-19
The global Covid-19 pandemic has put both consumers and businesses under extreme pressure. To help manage credit and finances during this time, the three bureaus and AnnualCreditReport.com have made reports available weekly - for free - through April 2021.
How do I know if my credit report is inaccurate?
The first step to work this out is to request credit reports from all three bureaus.
Not all creditors report to all three so when you compare each report side by side, you might see slight differences.
Don’t worry too much. This is quite normal.
However, do keep your eyes peeled for two types of details:
- Negative marks - such as a late payments
- Misinformation - such as your personal information details
When you spot either of the above, pay particular attention to them.
Is the negative mark accurate, or is it something you don’t recall? If it’s the latter, it’s time to check the information’s source and possibly prepare to dispute it with the relevant bureau.
Is the misinformation a simple spelling error? Or is it something completely unknown to you such as an account you don’t recognize or an address you’ve never seen before? If so, it’s possible you could be the victim of identity theft and you need to act immediately.
Follow the instructions in our guide “What to do if your identity is stolen“
What documents do I need to dispute my credit report?
Hopefully, the worst you need to address is a simple error and not a case of identity theft. Either way, if you’ve found an inaccuracy in your credit report, then you are entitled to dispute it.
As with any formal process, you’ll want to make it as simple as possible. Having relevant documents to hand is a great way to smooth the process. Examples of documents you might need are:
- Credit card statements
- Loan documents
- Bank statements
- Birth certificate
- Death certificate
- Marriage certificate
- Divorce decree
- Passport/Drivers’ licence
- Social security number
- Utility bill stating current address
- Past addresses
If you’re a victim of identity theft, you should also make copies of your Federal Trade Commission complaint and police reports available.
How do I dispute my credit report?
Each of the three main bureaus provide multiple channels through which you can dispute your credit report, either online, via post or via phone call.
What happens next?
The credit bureau will review your dispute and respond to you in writing, in most cases, within 30 days.
What happens if the bureau agrees there’s been an error in my credit report?
The bureau will remove the error from your report and reissue a new, updated one. You can also ask the bureau to send the correct and up to date report to anyone who received your report in the last six months.
What can I do if my credit dispute is denied?
Following its investigation, the bureau may maintain its information is correct. If you are certain this is not the case, then you still have options. The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government and responsible for protecting consumers in the financial sector. If you’re dissatisfied with the outcomes of your dispute, the CFPB is your next port of call.
Does disputing credit report hurt credit score?
No, you can’t be penalized for disputing your credit report. Your credit score can only change as a result of the information in it. If you’re disputing a negative mark, chances are your score will be positively impacted once this has been rectified. Even if your dispute is rejected, providing there are no other changes to the information, your credit score will remain just as it was - you can’t be penalized simply for challenging it.
The Fair Credit Reporting Act provides you with the right to dispute the information in your credit report. Doing so is free and you can dispute as many times as you like, within reason. Should you blindly dispute everything or dispute the same item over and over again, your dispute may be deemed frivolous. In this scenario, the credit reporting agency may have the right to refuse to investigate.
How to dispute an eviction or late medical bills (even if they’re technically accurate)?
Even if they’re accurate, there might be some items on your credit report that irk you. Perhaps it was a once-off late payment due to unusual circumstances. Or maybe your payment was late due to a delay on your insurance coming through.
If this sounds familiar, it may be possible to approach the creditor directly about removing a particular negative mark from your credit report. Sometimes, it can be as simple as settling any outstanding payments and explaining the circumstances of the late payment. For example, if you suffered an unforeseen hardship or you have an otherwise good history of prompt payment with the creditor.
Consider this, for example, when disputing an eviction, medical bills, late payments or hard inquiries.
How to dispute hard inquiries on my credit report?
A hard inquiry occurs when a lender requests your credit report after you apply for a loan, credit card or some form of finance. Too many hard inquiries can negatively impact your credit score as it may suggest financial instability.
The good news is hard inquiries fall off your credit report after two years.
If hard inquiries are present on your credit report as a result of identity theft, this is certainly grounds to dispute and have them removed by the credit reporting bureau much sooner than the two years.
Keeping up to date on your credit report can remove any nasty surprises when you’re making exciting life plans like applying for a mortgage. It’s also a smart way to routinely monitor any signs of fraudulent activity or identity theft.
Take control of your identity protection
Using Clario’s Identity Theft Protection is another smart move you can make to protect your identity. With its advanced software and access to security experts you can trust, you can enjoy extra peace of mind while you get on with your day.
We’d like to stay in touch.
We’ve got something special to share! Enter your contact details below to be among the first to find out about the exciting changes we’ve got in the works as well as to receive special promotions.
Thanks for your subscription!
You’ll be the first to know about our updates. Please keep an eye on your mailbox.