Everyone makes mistakes, and the credit reporting agencies are no exception. According to a 2013 Federal Trade Commission study, one in four consumer credit reports contain errors. Credit report errors can be anything from minor misses, like an incorrect phone number, to egregious oversights, like missed payments or loan defaults. Luckily, consumers have the right to access their credit reports for free and dispute any information they feel is incorrect. Here’s how.
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How to get a copy of your credit reportsThe first step in checking your credit reports for accuracy is, of course, to get a copy of them. There are three major credit reporting agencies, Experian, Equifax and TransUnion and you’ll want to get a copy of your reports from each company because sometimes an error can show up on one report, but not the others.
Consumers are legally entitled to get at least one free copy of each report a year from annualcreditreport.com and in some states, they can get as many free copies as they want. This may seem like a no-brainer, but only about 4% of consumers claim their free copies each year. So don’t be like the other 96% -- take a couple of minutes and check this critical to-do item off your list.
Checking your credit reports for errorsOnce you’ve received your three credit reports, you’ll need to thoroughly check over each one to make sure all the info on there is correct. Some items to look out for include ensuring any paid off loans or lines of credit are marked as closed and any lines of credits or credit cards show the right credit limit. Most of the information you see on your credit report should be familiar but if you see something you don’t recognize or information you think is incorrect, just highlight it or make a note – it might not actually be an error.
For example, some store brand credit cards are listed as a major credit card because that’s the company that actually issues the credit. Also, the information on your credit reports isn’t in real time, meaning they usually show information that’s about a month old. So if you recently made a large purchase or paid off a card, it may not reflect on your credit reports just yet. If you aren’t sure which lender is behind your store brand credit card or if your lender received your latest payment, just check your most recent statement or online account or…just call them! I know that’s totally old school, but it still works.
You’ll also want to check all your personally identifying information, like your birth date and addresses on record. Sometimes fraudsters may open accounts in your name and have the info sent to a different address or even rent an apartment using your stolen information. Something like an unfamiliar address or incorrect phone number isn’t necessarily a huge red flag, though – it’s possible someone accidentally entered the wrong information or made a typo -- but it’s definitely something you want to correct with the credit agencies.
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How to file a dispute with the credit agenciesIf you have a legitimate error on your credit report, then you need to file a dispute with each one of the credit reporting agencies. You can do this online, through the mail or over the phone, although it’s not always easy to reach a real, live person. It’s also important to note that it’s not the credit reporting agency’s fault that this item showed up on your credit reports – it was placed there because of someone else, like a lender or collection agency, reported it. So be nice to the credit reporting agencies because they are here to help you.
Once your dispute has been filed the credit agencies are required to do the following things:
- Show the item on your report as being in dispute.
- Contact the source of the disputed item (normally a lender or a collection agency) and ask them to confirm the information.
Once the source of the disputed item receives notice of the dispute, they are required to investigate. This includes reviewing the information and reporting their finding backs to the credit reporting agency. If the source of the disputed item finds that they did make a mistake or there is inaccurate information, they must notify all three of the credit reporting agencies so they can correct the information on your file.
Freezing your credit reportsIn addition to filing a dispute, you’ll also want to put a security freeze on your credit reports. If you’ve been a victim of identity theft, this will keep anyone from opening any new lines of credit under your name. You can keep the freeze on your account until you’ve sorted out what exactly is going on and how to make sure it doesn’t happen again. You may also want to sign up for a credit monitoring service, which alerts you every time there is new activity on your credit reports, and in some extreme cases, you can even get a new Social Security number.
Contacting the lender or collection agencyEven though the credit agencies are required to contact the lender or collection agency that reported the incorrect information, you can also contact them on your behalf. Your credit report will show which company reported the information, so make sure you contact that exact company. Make detailed notes each time you correspond with a representative from the company, including the date, time, the person you spoke with or emailed and what you talked about. If you send anything through the mail, make sure send it as certified mail, “return receipt requested” and make sure you keep the original copies of everything. This may seem like a pain, but unfortunately, it’s your responsibility to ensure these mistakes are cleared up, so you should document everything.
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How long does it take to resolve a dispute?There’s a lot of conflicting information about this floating around online, so let’s set the record straight. The law gives credit agencies 30 days to complete an investigation. However, if you send any supplemental information during this time, like additional documentation, the agencies gets an additional 15 days to complete the process. So you can expect some kind of resolution within 30 to 45 days from filing a dispute.
Once you receive notice of a resolution, you can ask the credit reporting agencies to send notices of any corrections to anyone who has received a copy of your report in the last six months. You can also ask them to send a notice to anyone who has received a copy of your credit report for employment purposes in the last two years.