Nothing gets your heart rate going quite like discovering an error on your credit report. Whether it’s a line of credit you never opened, a closed account that is registering as unpaid or a bankruptcy that isn’t yours, an error can spoil your credit history and damage your credit score.
To correct the information, you can dispute the error — but the process isn’t always straightforward. Here’s what to know about disputing a discrepancy on your credit report — and how to do it effectively.
[See: 12 Habits to Help You Take Control of Your Credit.]
1. Identify the error. The best way to sniff out errors on your credit report is to check it regularly. Head to annualcreditreport.com, where you can get one report yearly from each of the three credit-reporting bureaus: Equifax, Experian and TransUnion.
2. Make sure that it’s actually an error. Before you start spinning your wheels through the dispute process, make sure you’re actually reporting an error, says credit expert John Ulzheimer, who formerly worked with FICO and Equifax.
You may think you’re seeing an incorrect item when, in fact, it’s just a debt you don’t recognize. For example, you may not recognize the name of a debt collector reporting late payments on your account (but you may still owe that debt). An unfamiliar debt issuer may be the third-party company that manages a store credit card you applied for a few months ago. There’s no point in contesting correct information with the credit bureaus: Up-to-date and accurate information will stay on your report, even if you dispute it.
[See: 12 Simple Ways to Raise Your Credit Score.]
3. Consider your method. When reporting an error to the credit-reporting bureaus, you may choose to pursue the process online, over the phone or through the postal service. You’ll need to provide identifying information, pinpoint which data points are incorrect and possibly provide supporting documentation.
For simple fixes, Ulzheimer recommends using the bureaus’ online portals. “If you’ve got a more convoluted and complex type of dispute — something that arises out of a divorce decree, for example — then using the U.S. mail system is not a bad idea,” he says. The Federal Trade Commission recommends sending your letter (it provides a template online) by certified mail and requesting a return receipt, so that you can see when the bureau receives your forms.
Sending personally identifiable information through the online system may be more secure than through the postal service, says Rod Griffin, director of public education for Experian. Plus, it may be faster. “Today, the easiest, fastest and safest way to dispute information is online,” Griffin says. “It’s through a secured and encrypted system, and the process begins immediately.”
4. Be specific. Be as detailed as possible when disputing information on your credit report, experts say. That may include providing supporting paperwork and clearly identifying each item on the report you want to contest. If you’ve been dealing with financial fraud, for example, a police report may be useful, Griffin says.
If you’re sending a dispute via snail mail, make sure to send photocopies of your background information, not the originals.
5. Know your rights. The credit-reporting bureaus and information provider (the credit issuer, debt collector or bank, for example ) are responsible for correcting errors on your report under the Fair Credit Reporting Act. Credit-reporting companies must consider your dispute, typically within 30 days, unless it’s deemed frivolous, according to the FTC. The bureaus should work together with the information provider to clear up any inaccuracies. You can also write a letter directly to the information provider — the FTC provides a sample letter — instructing the company to investigate the error. When everything’s squared away, you should receive the results and a free copy of your report if there’s a change, according to the FTC.
“Per the Fair Credit Reporting Act, you have the right to do this for free,” Ulzheimer says. “You should never feel compelled to pay somebody to do this for you.”
[See: What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments.]
6. File a complaint. If you feel like the credit bureaus or information provider are not doing their due diligence when it comes to your credit-reporting dispute — say, you’re experiencing long delays or the company is not appropriately considering your dispute — you can file a complaint with the Consumer Financial Protection Bureau. “The complaint program is almost like an appeals court in terms of these disputes,” says Jonah Kaplan, markets analyst for consumer reporting at the CFPB.
The credit bureaus will be alerted once your complaint is filed — and potentially be motivated to address your concerns. You may also reach out to your state’s attorney general, department of consumer affairs or consumer advocate law office to file a complaint, investigate next steps or, when all else fails, even file a lawsuit.
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6 Steps to Contest an Error on Your Credit Report originally appeared on usnews.com
