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Your credit score is more important than ever. Your FICO score will determine whether you are eligible for a mortgage loan, and if so, at what interest rate. FICO scores are also an important part of renting an apartment, purchasing or leasing a vehicle, and even what you will pay for auto insurance.

At the same time, a single negative item can greatly damage your FICO score. If you end up with a late payment, collection account, auto repossession or charge off, your score could drop by 100 or 200 points.

If you end up with a damaging mark on your credit, it’s wise to be concerned. Fortunately, there is an effective means through which you can address negative items on credit reports – the credit dispute process. Below, we’ve shared a letter that can make this process easier, and help remove negative accounts. 

For each type of negative item (such as a repossession or charge off), there is a unique process by which the item can potentially be removed. In some instances, if an error on a credit report is not corrected, you might even have grounds to sue the credit agencies and the creditor / debt collector, and obtain damages.

Let’s take a look at how the process works. First, it’s important that you understand a bit about the laws governing credit reporting.

How The Fair Credit Reporting Act (FCRA) Protects You

The Fair Credit Reporting Act (known as the FCRA) is a federal law, passed in 1970. The FCRA regulates what sort of information can appear on your credit reports, and how the credit reporting agencies can conduct themselves.

Amongst it’s many provisions, the FCRA places a requirement on credit reporting agencies (like Experian, Equifax and TransUnion) to report accurate information about your credit accounts. If these agencies fail to report information accurately, you have the right to dispute the erroneous information.

The Credit Dispute Investigation Process

The credit agencies are required to review your dispute, and conduct a “reasonable reinvestigation.” The specific requirements for a reasonable reinvestigation have been the subject of numerous court cases.

The credit agencies have 30 days (from when they recieved your dispute) to complete this reasonable reinvestigation. After that, they must inform you of the results of their reinvestigation.

In some instances, if you provide the credit agencies with additional information after the reinvestigation has begun, they will have 45 days to complete your investigation. Please note that these timelines do not include how long it takes to mail your disputes back to you, which can take a while.               

Within five days of receiving your dispute, the credit reporting agencies must inform the party which is reporting the disputed information (such as a credit card company or debt collector) that you’re disputing the debt. The party which reports the disputed information is known as a data furnisher.

Potential Outcomes Of Your Dispute    

If the data furnisher believes that the information you disputed is accurate (i.e. the data furnisher didn’t make a mistake), they’ll inform the credit agencies of this. The accounts will then be marked as disputed. The negative information you disputed will not be removed. 

If the data furnisher finds in favor of you, and decides your dispute had merit, then the information you believed was innacurate will be corrected or removed. Obviously, this is your ideal outcome. Often, your credit score will increase because of this change. 

In some situations, the data furnisher finds the information you disputed was in fact accurate, but some other part of the account was innacurate or outdated. Perhaps you argued that you didn’t pay late a few months ago. 

The data furnisher disagrees, and asserts that you did in fact pay late. However, the data furnisher realizes that the date they had claimed the account was opened was incorrect, and so they update that part of the account.

How To Use The Dispute Letter Shared Below

Before we dive into using the letter below, we want to share a few guidelines. First, the letter below is not guaranteed to remove any negative items from your credit reports. If an item on your credit reports meets legal requirements, there’s no obligation on the part of a credit agency or data furnisher to remove the item. 

Additionally, if you already disputed a credit item (before reading this article), the letter below probably won’t work. Thus, you should only use this letter for non-disputed items.

It is also vital to remember that these letters are often just a first step in the process. If you dispute a negative credit item using these letters, and it isn’t removed, you’ll probably need to follow more detailed procedures. 

For a credit card charge off, that might involve finding specific discrepancies in how the account is reported. With a repossession, it could involve figuring out whether the proper notices were provided. This involves dealing directly with the data furnishers.

You’ll want to avoid disputes of collections accounts using this letter. To address collections accounts, you should dispute directly with the debt collector. You can do that through the use of a debt validation letter.  

It is vital that the dispute letter be sent by certified mail. This way, you have proof that the letter was in fact provided by you.

Please note that if you’re disputing multiple non-collection accounts, you can mention each of them in the same letter. There’s no need to prepare a different letter for each account.

Make sure to attach your photo ID with the letter, along with your proof of address. The credit reporting agencies typically require such information in order to identify you. 

We’d also like to share a word about disputing accounts (especially credit card charge offs or repossessions) where you owe a large amount of money. Disputing such accounts can trigger a lawsuit by the creditor.   

We typically send the same copy of this letter to each credit reporting agency (separately). That’s why you see the address of each credit agency on the top of the report. Below is the letter. 

(Date)

To: Experian , ATTN: Supervisor, Legal Department

701 Experian Parkway

P.O. Box 1240

Allen, Texas 75013

To: Trans Union ATTN: Supervisor, Legal Department

555 West Adams Street

Chicago, Illinois 60661 

To: Equifax ATTN: Supervisor, Legal Department

1550 Peachtree Street Northeast

Atlanta, GA 30309

My Name: (Insert full name)

My date of birth (Insert date you were born):

My Socal Security Number (insert full Social Security Number):

My Address (Insert full mailing address):

Hello,

I am writing to you about some accounts on my credit reports. I don’t believe that these accounts are reporting in a fully accurate and complete manner. For this reason, I would like you to investigate these accounts, and tell me what you find out.

The first account I’m writing to you about is with (Insert name of creditor), and the account number is (insert account number).

The second account is with (insert name of creditor) and the account number is (insert account number).

(Continue with any other non-collections accounts you’re disputing).

Sincerely,

(First and last name)

The Final Word

Send these letters off, and await a response (by certified mail). In your best case scenario, the accounts will be removed. 

If not, you have informed the credit reporting agencies of your dispute, and recieved an updated credit report. Depending on the type of account, there are then further steps you may take to try removing the account from your credit reports.

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