Human beings have legal rights that protect our safety, identity, and property. More specifically, per the Fair Credit Reporting Act (FCRA), we also have the right to an accurate credit report.
More specifically, per the Fair Credit Reporting Act (FCRA), we also have the right to an accurate credit report.
That said, credit reporting companies make mistakes. And businesses that report to these companies — the information providers — don’t always hit the mark.
Inaccurate credit information may also be the result of identity theft. If someone uses your name to commit fraud and you don’t catch it right away, their delinquent account will likely appear on your credit report.
Accordingly, it’s up to you, the consumer, to review your credit report from time to time. Your credit information ought to be accurate, up-to-date, and complete before you apply for a loan or job, or even purchase insurance.
Consequently, if you spot inaccurate information on your report, it’s crucial that you dispute it.
The following information outlines how to kick off the dispute process.
Dispute inaccurate credit information: request a credit report and identify the type of error
Before you dispute inaccurate credit information in your report, you must identify the type of error.
This will ensure you understand the discrepancy. After all, the more informed you are, the quicker the credit reporting agency can investigate the dispute.
Take note of the following categories to determine the type of error in your credit report:
1. Account Information Errors
These include information such as a late payment that’s over seven years old. This includes a credit card or loan account that doesn’t belong to you (or on which you are not an authorized user). This can also include an account that was closed by you but is listed as closed by the provider instead.
2. Derogatory Mark Errors
Derogatory Mark Errors include a paid tax lien — a legal claim against the assets of a noncompliant taxpayer — that is more than seven years old, an account closed in bankruptcy that is listed as active with a balance, or a paid-off debt collection that is listed as unpaid.
3. Fraudulent Account Errors
These errors indicate that an unauthorized party has used your personal information to open an account. You may dispute this information if it appears in your report.
However, consumers are also encouraged to implement a security freeze to keep others from opening new lines of credit in their name. Make sure to keep the freeze on your account until you’ve resolved the issue.
4. Personal Information Errors
These errors include the wrong name, incorrect addresses (including previous addresses), and inaccurate employment information.
Inform the credit reporting company of the error
To dispute inaccurate credit information, get started by notifying the credit reporting company in writing.
Send letters by certified mail. Write “Return Receipt Requested” by the return address so you can track what the credit reporting company has received from you.
Make sure to include the following in your correspondence:
The type of information that you dispute
A list of each item with an explanation
A copy of your credit report with the inaccurate information circled
Copies of the documents that support the discrepancy
Credit reporting companies must investigate consumer disputes within 30 days, and forward the relevant data to the information provider.
After they’re informed of the dispute, they must investigate and communicate their findings to the credit reporting company.
In turn, if the information provider confirms the inaccuracy of the disputed information, they must notify all three national credit reporting companies.
Upon completion of the investigation, the credit reporting company will send you the results in writing. They should also send a free copy of your report with the updated information.
They will also provide written notice with the name, address, and phone number of the information provider.
You may also request that the credit reporting company send out notices to all entities who received your credit report in the last six months.
Furthermore, you may request that they send a corrected copy of your report to anyone who received a copy for employment purposes in the last two years.
Conversely, if the investigation doesn’t resolve your dispute, you may have another option. You may request that the credit reporting company include a statement of the dispute in your file and in all future reports.
Notify the information provider of the error
Consumers are encouraged to report inaccurate credit information to the credit reporting agency. And the agency is obligated to communicate with the information provider during the investigation. But you may also inform your lender of the dispute.
In many cases, corresponding with the lender directly — in addition to filing a dispute with the credit bureau — will speed up the investigation, and help the consumer determine the source of the erroneous information.
You may follow the same steps listed above to file a dispute with the information provider or begin the process with an informal conversation.
An informal conversation, however, should be reserved for your lender rather than the credit bureau. And finally, remember to document your communication!
*Note: If you are dissatisfied with the outcome of your dispute, you may speak with a credit repair lawyer, file a complaint with the Consumer Financial Protection Bureau (CFPB), or reach out to your state’s Department of Consumer Affairs or Attorney General’s office to discuss how to best proceed.
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Founder of TeachLegal
ABOUT THE AUTHOR
Shawn Smith is the founder of TeachLegal, where he helps readers educate themselves on personal finance, credit repair, debt solutions, and consumer law.
Shawn is an attorney representing clients in the Iowa District and Appellate Courts, Iowa Northern and Southern District Federal Courts, and the Northern and Southern District Bankruptcy Courts for the State of Iowa.