According to the Federal Trade Commission, an estimated one in five customers has at least one mistake on their credit reports. These errors may seem harmless, but they can quickly become major issues for your finances. The Consumer Financial Protection Bureau (CFPB) has set guidelines for disputing these errors in the hopes that the process should be simple. Unfortunately, sometimes credit card companies, banks, and credit reporting agencies do not make it easy, and the process can quickly become confusing, time-consuming, and frustrating.
Knowing how to dispute errors may give you an advantage if you ever find an issue on your credit report. The first step is checking that report.
Just like you check your bank statements for errors, it is important to check your credit report too. Keeping an eye on this information can help you to ensure that your credit will remain in good standing, and that the report stays error-free. Checking your report can also help monitor for any signs of identity theft.
To check your credit report, go to annualcreditreport.com. This is a free government service that allows you to check your credit reports from the three major credit reporting agencies—Experian, Equifax, and TransUnion. Typically, you can only request your credit report once a year. However, due to the COVID-19 crisis, Americans can now get free weekly credit reports through April 20, 2022.
Once you have your credit report, begin going through all the information listed and keep an eye out for errors. Some errors, such as simple misspellings on previous addresses, are not a big deal and will not affect your credit.
However, major errors can be harmful. Look for the following errors:
If you notice any of these major errors, dispute them quickly. Additionally, if you notice an error on a report from one credit reporting agency, check the reports from the other two as well. This can help determine where the error originated.
So what do you do if you find an error? Follow the steps below for help.
The first thing you should do if you find an error on your credit report is to dispute the error. It is your right to dispute errors on your credit report with the three major credit agencies. You can dispute errors by mail, phone, or online. Whichever way you choose, be sure to document all communications with the agencies, banks, or creditors. we recommend that you consider disputing errors by certified mail so that you can include supporting document, prove mailing and receipt, and keep copies of all the documents.
To dispute a credit error by mail, begin by gathering a list of all the errors and incorrect information that you have found on your credit report. Then, write a letter that explains each necessary correction. In this explanation, remember to include evidence of the error and, if applicable, what the correct information should be. Finally, include a copy of the incorrect credit report with notes to indicate the issues.
Once you have this information gathered, send it to the credit agencies that have the errors present. Each agency has a specific address for receiving mail-in disputes, so be sure to use the correct address.
Each major credit agency has a specific phone number for call-in disputes. When you call, be sure to have the incorrect report ready to reference, and any other supporting documents that may be necessary to correct the issues.
Just like the phone numbers, each major credit agency has their own online portal for disputing credit report errors. When you begin the online process, be sure to have all relevant documents on hand. This should include the incorrect credit report, and any supporting documents needed to correct the issues. You will need to have these documents to reference as you complete the process online.
Once you have filed a dispute, the credit bureau(s) will begin an investigation. In some cases, they may contact your bank or credit card companies to verify details.
If the agency agrees with the errors you have found, they will fix your credit report and send you a revised copy. However, if they do not agree, they will not change anything on your credit report. At this point, you will need to take action.
If the credit agency cannot fix your report, the next thing to do is to try contacting the bank or credit card company connected to the error directly. Notify them of the error and, if applicable, provide documents that show what the correct information should be. If the error did in fact originate with the bank or credit card company, they may be able to correct the issue this way.
If you have attempted to dispute the error on your credit report with the credit bureaus and with your creditor without success, it may be time to find a lawyer. When looking for a lawyer, look for one that practices consumer protection law, and who has experience in credit defense. These lawyers have experience in the state and federal regulations that help to protect your rights. If credit reporting agencies, banks, or credit card companies fail to fix the errors on your credit report, you have the right to take legal action.
Your credit report is an important document that helps banks and credit card companies determine the strength of your credit. If the information in your report is incorrect, it could cause banks to decline loan applications, close bank accounts, and raise your interest rates.
If you believe credit agencies, your bank, or your credit card company are failing to take your dispute seriously, it is time to contact the Financial Justice Initiative for help. The lawyers at FJI are experienced in holding credit reporting agencies, banks, and credit card companies responsible, and enforcing state and federal consumer protection policies.