How to Dispute Errors on a Credit Report

 

By Kevin Mercadante

If you need to dispute errors on your credit report, there is actually something of a standardized procedure that you’ll need to go through in order to do it successfully.

Though your first instinct may be to contact the credit bureau as soon as you discover an error on your report, that’s actually not the best place to start.

Dispute Errors with the Creditor First

Anytime you find any errors on your credit report, you should always start by contacting the creditor first. There are at least three reasons why:

1. If you clear up the discrepancy with the creditor, they will (generally) report the corrections to the credit bureaus automatically.

2. There are three credit repositories - Equifax, Experian and Transunion - and if you dispute the discrepancy through one of them, the changes will not necessarily transfer to the other two.

3. The credit bureaus may refuse to change erroneous information without some sort of written confirmation of the change from the creditor.

The basic idea is to first fix the problem with the creditor, and then have the information updated with the credit bureaus.

When to Contact the Credit Bureaus about a Disputed Entry

You should always approach creditors first with any errors, but there will be times when you will need to contact the credit bureaus directly.

Examples include:

  • When a creditor has no record of you having an account with them. This often happens when an account is a few years old, but has no current activity. The credit bureau will contact the creditor, and when the creditor confirms that they have no record of the account, the bureau will likely delete the entry completely.
  • When the creditor is uncooperative. In this instance, you should not only write a letter to the credit bureau, but you should also enclose any written evidence that clearly supports your claim. There’s a reasonable chance that the credit bureau will remove the negative information from your report, but it’s not guaranteed.

There are a few things that you will need to know if you do contact the credit bureaus:

  • If you dispute any information on your credit report, the credit bureaus are required by law to investigate your claim.
  • Since there are three credit bureaus, you will need to contact each individually. Clearing up an error on with one bureau will not fix it with the other two.
  • The credit bureaus have up to 45 days to provide you with the determination of their findings.
  • Though you can dispute an error by phone, it is always best to have a paper trail to help prove your case. Email and snail mail will be necessary.
  • Credit bureaus are notoriously difficult to contact by phone, which is yet another reason why email and written correspondence are the preferred routes.

If the credit bureau contacts the creditor, and the creditor refuses to change the information, you can add a statement to your credit report indicating that the information provided by the creditor is disputed, and the reasons for the dispute.

In the event that the creditor is uncooperative, and discrepancy is having a significant negative impact on your credit report and credit score, you may need to consider legal action against the creditor.

Get Your “Ducks in a Row” Before Making a Dispute

If you’re going to dispute an entry on your credit report, you’ll need evidence to support your claim. Evidence of payment of the disputed item is the strongest form of documentation. This can include copies of canceled checks or of a bank statement or credit card statement confirming that the obligation has been paid, and was paid on time.

If the account in dispute is an ongoing credit account, such as an installment loan or revolving debt, you may also need to supply evidence of payment for several months. This can help to make sure that there wasn’t a misapplication of a payment.

It’s important to understand that if you cannot produce written evidence of your claim, it will come down to your word against the creditor. And as a general rule, the credit bureaus will give primary weight to the position of the creditor.

Write a Letter or an Email to Dispute the Error

As mentioned earlier, the best way to dispute a credit error - either directly with the creditor, or through the credit bureaus - is by either email or a written letter. It will be much more effective than a phone call. It will also provide you with point of reference in the often likely event that you need to follow up after the fact.

Check out our post How to Write a Credit Dispute Letter to learn how to write a letter that will get results.

About Kevin Mercadante

Kevin Mercadante is a freelance professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has extensive backgrounds in both accounting and the mortgage industry. Follow Kevin on Google+.