When there is an error on your credit reports, it often isn’t clear what you should do. Should you dispute the account with the credit bureaus, or contact whoever placed the erroneous information on your credit reports? Or, should you handle this by a phone call, a fax, or an email?
While credit repair can be a rather complex process, there are some important guidelines to keep in mind. By following the tips listed below, you’ll be able to effectively correct information on your credit reports which is innacurate, protecting your rights as a consumer.
1. Obtain Your Official Credit Reports From Annual Credit Report
There are countless sources of free credit reports. You can visit Credit Karma, to obtain your free Equifax and TransUnion credit reports, with your Vantage credit scores, and freecreditscore.com, for your Experian report, and a FICO score. Banks like Discover, Chase, Wells Fargo and many others, offer free credit reports and scores.
The increased availability of credit reports and scores is a wonderful development. It’s easier than ever, for you to monitor your credit reports, and keep an eye out for risks like identity theft. At the same time, if you want to address potential errors and inaccuracies on your credit reports, you’ll need to visit a different source: Annual Credit Report.
Annual Credit Report provides you with your official credit reports, once every 12 months, as required by federal law. These reports are generated directly through Experian, Equifax and TransUnion, and offer the most complete source of information regarding your credit.
If you plan on challenging any innacurate information on your credit reports, it is important that you have access to the most comprehensive source of credit data. Review these reports, and address errors on your credit reports, based on what appears on there.
You can download your reports, and save them as a PDF, by visiting www.annualcreditreport.com. In the alternative, they can fill out a mail-in form, and have the reports sent to their home.
2. Dispute Errors By Certified Mail
The Fair Credit Reporting Act (FCRA), is the federal law which governs credit reporting. Amongst it’s many requirements, the FCRA requires that information on your credit reports be accurate, verifiable, complete and timely. In essence, every piece of information on your credit reports must be full, correct, and there must be proof that it is correct.
The FCRA allows you to address negative information on your credit reports, by disputing with the credit bureaus. Credit bureaus are required to investigate your claim, and provide a response within 30 to 45 days. This process carries numerous complexities, but these are the basic first steps.
There are a number of ways through which you might dispute errors on your credit reports. You could send a fax to the credit bureaus, or give them a call. You could use the dispute portal available through Credit Karma (for Equifax and TransUnion credit reports only). Or, you could send a letter to the credit bureaus, via certified mail.
Of all of these methods, certified mail is by far the most effective. Fax access to credit bureaus has been heavily restricted in recent years. Disputing by phone isn’t always a bad idea. Still, it does force you to explain your credit issues to a representative, who often is not focused on helping you – rather, their goal is to save the company money.
Credit Karma offers a tremendous amount of convenience when disputing errors on your credit reports. However, Credit Karma’s dispute tool is designed with the interests of the credit bureaus in mind. It offers a series of options for you to select, as to why a particular account on your credit reports, is being reported in error.
These limited choices make things easier for the credit bureaus. You need to define your dispute on your own terms, rather than being pigeonholed.
For these reasons, the best way to address erroneous information on your credit reports, is by sending a letter via certified mail. In this letter, you should clearly list the name of each account which contains errors, as well as the account number. You must also include your personal identifying information, such as your name, Social Security Number, and address.
Credit bureaus must investigate these errors within 30 to 45 days, and either correct or delete innacurate information. There are numerous intricacies to this process (see #3), but a succesful correction of errors on credit reports, should always start with a certified dispute letter.
3. Understand The Laws Which Govern Information On Your Credit Reports
As we mentioned earlier, the Fair Credit Reporting Act (FCRA) is what makes it possible to remove erroneous information from your credit reports. However, the FCRA contains numerous intricate provisions, which you should have a basic understanding of, to make sure that your dispute process is as succesful as possible.
First, understand that the FCRA imposes several requirements on very account which appears on your credit reports. Each piece of information on your reports must be 100% accurate, fully verifiable, and not out of date (since most negative items cannot remain on your credit reports for longer than 7.5 years, with the exception of some bankruptcies).
This means that not only must an account belong to you, but each piece of information on the account must be correct. For example, if a collection appears on your credit reports, the amount owed must be correct, as well as the date the account was opened and closed, the name of the original creditor, and so on. What’s more, the debt collector must provide proof of these claims – to merely claim something as true, is not enough.
If collections appear on your credit reports, you’re also protected by the Fair Debt Collection Practices Act (known as the FDCPA). The FDCPA forbids debt collectors from engaging in certain conduct, such as calling you before 8 AM, or after 9 PM, contacting you on a work cell phone, after you’ve made it clear that you don’t wish to be called on that line, or using abusive language. These are just a few of the FDCPA”s powerful provisions, which protect consumers. If your rights were violated under the FDCPA, you might have additional grounds for pushing to have a collection account removed.
4. Be Persistent
In various aspects of life, you’ve probably heard plenty about the importance of persistence. If you give up too quickly, you usually won’t get what you want. This applies to challenging errors on your credit reports.
If you write a single dispute letter to credit bureaus, and expect for errors on your credit reports to be corrected, you’ll probably be disappointed. Credit bureaus process most dispute letters through the use of an electronic system called E Oscar, where they simply send a code, just one or two digits, indicating that a consumer believes information on their credit reports is innacurate.
These codes are based on the Metro 2 system, which is how data furnishers report information to credit bureaus. While credit bureaus have a legal duty to make sure that information on credit reports is accurate, they often fall short of meeting these obligations. For this reason, there are thousands of FCRA lawsuits each year.
For this reason, you should assume that it will require multiple rounds of disputes, to have any chance of correcting errors on your reports. You’ll need to first contact credit bureaus, asking that they investigate the account which you believe has errors.
Next, you’ll explain why information is innacurate, and provide supporting documentation for your claims. If that fails to correct the errors, you’ll also need to contact the data furnisher (whoever placed the information on your credit reports), and inform them of why the information is not correct.
After this, you’ll probably again need to contact the credit bureaus again, and government agencies like the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and the attorney general of your state. You might also need to speak to a consumer rights attorney, and find out whether you have grounds for a lawsuit.
As you can see, a succesful credit dispute process involves numerous steps. If you’re hoping that your credit issues will be resolved instantaneously, you’ll often be disappointed. The good news is that there is a process to correct credit reporting errors, and thousands of Americans have applied it, with great success.
5. Provide Documentation Of Your Credit Reporting Errors
When you first attempt to correct an error on your credit reports, you should simply request that the credit bureaus investigate whether all of the information on your credit reports is in fact accurate. The information which they report must be accurate – you are simply asking them to confirm this.
In later rounds of your credit disputes, however, you’ll need to provide specific examples of what you believe is innacurate on your credit reports. For example, if you think the amount owed on a collection account is incorrect or inconsistent, you should state this, and provide any proof you have.
This could include something as simple as the balance on the account being incorrect, and to prove it, you’ll show that a different balance is listed on your Experian credit report, than your Equifax reports, or that the balance listed does not match your own records. Or, you might show that the contract you signed with an original creditor, does not provide for you being charged interest. In short, whenever you can, you should prove your claims – or at least show that what the credit bureaus and data furnishers are claiming, is incorrect.
The Final Word
Correcting errors on credit reports is a challenging, involved process. You must obtain your official credit reports, write certified letters, and gain a better understanding of the laws which govern credit reporting. You’ll need to dig deep into your credit reports, and be patient. It’s not an easy process – but it can transform your financial future, and thus is absolutely worth it.
Remember, if the dispute process does not correct errors on your credit reports, then you may have grounds to file a lawsuit, under the FCRA. Since you don’t have to pay attorney’s fees (these are paid by the credit bureaus and creditors / debt collectors if you win), it often makes sense to pursue your claims in court, if errors are not corrected in a timely fashion. Consult with a consumer rights attorney, if you feel like errors on your credit reports have not been corrected.
