September 6th, 2012
5 Steps to Cleaning Up Credit Report Errors
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Now that you’ve learned how to get a copy of your credit report, what do you do with it? It’s time to get down to the nitty-gritty and clean it up!
Your credit report could contain an error, and you won’t know it unless you look. Anywhere from 3 to 25 percent of credit reports contain serious errors. The most common are outdated personal information, mistaken or fraudulent accounts and incorrect account details.
Here’s how to go about checking for and disputing those pesky credit report errors. Buckle up—it’s a long one!
Step 1: Review your credit report.
Once you have your reports printed out (yes, really print them out), go through each one, page by page. What are you looking for? Here’s a quick list:
- Incorrect our outdated personal information. Example: There’s a mailing address you’ve never had.
- Wrong account details. Example: Your report shows that your Discover card has a $5,000 limit, when it should really be $2,500.
- Incorrectly attributed accounts. Example: There’s a credit card account that belongs to your parents, not you.
- Fraudulent accounts. Example: You find a student loan on your credit report, but you’ve never applied for a student loan.
- Inaccurate activity. Example: You’ve never made a mortgage payment late, but your mortgage shows otherwise.
That list isn’t exhaustive, but it should give you an idea of what to keep a lookout for. If you find an error, highlight or circle it. Make sure to check to see if the error is on one credit report or all three.
Important note: You may notice that one of your credit files is missing from one of two of your credit reports. This can happen if you have a credit line from a small company like a credit union. Not all companies report to all three bureaus. Before you assume it’s an error, check with your creditor to see who they report to.
Step 2: Gather your proof.
Before you contact any credit bureau about a credit report error, make sure you have some proof to support your claim. For instance, if you find a mortgage that was opened in your name in 1974, but you were born in 1972, you should provide proof of your birthdate.
Step 3: Write a letter.
It may be old-fashioned, but the best way to dispute an error on your credit report is to draft a dispute letter. You’ll send this letter to the credit bureau(s) reporting the error to get it corrected. Make sure to send it “return receipt requested” so that you’ll know when it’s been received. The FTC has a great sample dispute letter; use that as your guide.
Step 4: Make a copy of everything.
Seriously. Copy the letter, the documents you’re using as proof and the page(s) of your credit report with the errors clearly marked. Keep these documents filed away so you can easily find them later. Once you have your copies, mail your dispute letter.
Step 5: Wait at least 30 days before following up.
Credit bureaus are required by law to investigate your claim, and they typically do so within 30 days of receiving your request. The credit bureau should send notification to the information provider (like your credit card company or mortgage lender) about your dispute. The information provider will investigate and let the bureau know the results. If your dispute is valid, the information provider also has to notify the other two credit bureaus.
If it’s been more than 30 days since the credit bureau received your dispute, and you haven’t heard anything, contact the credit bureau to get an update on the status.
What can I do if my dispute wasn’t successful?
There are a couple of reasons why these disputes fail:
It was considered “frivolous.” This is the only scenario in which a credit bureau won’t even bother to investigate your claim. If you don’t consider it to be frivolous, you can attempt your dispute again, following the above steps.
It wasn’t an error. If you’re trying to remove a negative—but accurate—item from your credit report, you won’t be able to dispute it. Instead, you’ll have to take the slow and steady route of improving your credit health.
The credit bureau says it’s not an error, but you have proof otherwise. This can happen from time to time. Once again, you can spend time repeating the dispute steps, but you might have a better, second option: a direct dispute.
If you’re disputing an item that has come from an information provider—like a credit card company or mortgage lender—you can go directly to them. Submit a dispute letter to the information provider, using the same FTC guidelines, but also make sure that you include your full name and account number with the company. Since the dispute with the credit bureau didn’t work, this direct dispute could be a great alternative.
If you want help with the dispute process, consider hiring a credit repair company such as Lexington Law Firm.
To catch future errors, start monitoring your credit with Credit Karma. You’ll receive an email when something important changed in your credit report. And come back for more great Self-Improvement Month posts!
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