The Process of Disputing Incorrect Information on Your Credit Report
A look at your credit report reveals some details about you such as how you pay your bills, where you live, if you have ever filed for bankruptcy, and so on. The credit bureaus share your information, mostly at a fee, with banks and other creditors, insurers, employers, businesses, and other such parties. These entities use the data to assess your credit applications, insurance coverage, assist with making a decision when hiring you, or to decide if they will allow you to rent their buildings.
According to some financial advisors and consumer advocates, you should review your data from time to time for the following reasons:
- To verify that the information in the report is correct, complete, and up to date before you can apply for credit, insurance, seek employment, or make a big purchase, for example a car or home.
- For the main reason, which is that the info contained in them can determine if you can get a loan and at what cost.
- To be on the lookout to avoid identity theft. The use of your personal information such as your name, credit card number, social security number, or any other information can be used by unscrupulous people to commit fraud.
Fixing credit report errors
You are entitled to a free copy of your credit report from each of the three main credit reporting agencies once every twelve months. If you notice an error in your report, initiate a dispute to have the mistake corrected, and doing this can boost your credit score. Similarly, you can improve your score by engaging credit repair experts who use tradelines. So, how do tradelines help your credit? Well, you are added as an authorized user on an account of a borrower with an impressive credit history and score, and that improves your score.
To fix credit report errors, take the following steps:
Notify the credit bureau
Once you spot an error in your report, you should get in touch, preferably in writing, with the credit bureau that issued the report with the error. The three main credit bureaus provide a means of disputing inaccurate information via email or online. You need to state clearly what the issue is, your reason for deeming it incorrect, and ensure that you include any supporting documents. Keep copies of the supporting documents and communication.
Evaluate if you should contact the furnishers
The Consumer Financial Protection Bureau (CPFB) advises that while disputing credit report error, you should also contact the entities that provide the credit bureaus with the information (furnishers). Furnishers include banks and credit card issuing companies. You can even contact the furnisher before the credit bureau and save yourself a longer process, but if it’s an identity issue, you have to contact the bureau.
Wait for the results of the investigation
The credit bureau will inform you of the outcome of the investigation within 30 days of raising the dispute. The bureau will let you know if the information will be modified, removed from the report, or retained as it is. It carries out its investigation or engages the furnishers to investigate the information that they supplied them. At times, the credit bureau or furnisher may deem your dispute “frivolous,” like if you submit incomplete or incorrect information as your dispute. It may also term it frivolous if you try to contest the same issue several times without any additional information. When the bureau decides that your dispute is frivolous, they do not have to investigate it further as long as they communicate that to you within five days and give their reasons for deciding that the dispute is frivolous. You have an option to resubmit such a dispute, but do so with additional information.
Review the results of the investigation
The credit bureau in question must give you the results of the investigation in writing with a free copy of your credit report if the dispute caused a change to that report. It must also provide you with the name and contact information of the furnisher that forwarded the incorrect information.
If the furnisher continues forwarding a disputed item, you should inform the credit bureau about your dispute, and if the disputed item is established to be inaccurate, the furnisher is required to inform the credit bureau to delete or update the item. All other credit bureaus with whom the furnisher share information must be informed as well so that they can rectify their records.
Check for updates to your credit report
Amendments on your credit report may take some time to be seen on the report depending on the update cycle of the particular credit bureau and when the furnisher submits the new information to the reporting agency. If the updates do not appear on your credit report within a couple of months, get in touch with the credit bureau and furnisher to make sure that the furnisher is forwarding your account information to the credit bureaus.
You should review your credit report regularly to check for any errors or inaccurate information so that you can dispute them and have them rectified. Any incorrect information can affect your chances of getting a loan, job, apartment to rent, or even favourable premiums for insurance coverage.