How to Dispute An Item On Your Credit Report
I have seen estimates that say as many as 70% of credit reports contain inaccurate or downright false information. Do you know if yours is one of them?
A quick check of your credit report should tell you everything you need to know. It will also help you to catch any instances of identity theft.
If you do not monitor your credit reports regularly, you can still check them once a year for free by going to Annual Credit Report.com.
Any other sites or advertisements that you see do not actually let you check your reports for free. Only Annual Credit Report.com is the real deal.
So, you’ve checked your credit report and found bad information, what then? Let’s take a quick look at the dispute process:
You can create an account with all three of the credit bureaus (websites below). All three have entire sections of their sites dedicated to helping you challenge this bad information on your credit report.
Here are the sites you will need to visit:
Once you log in with them, you can begin the automated process of challenging the information on your credit report.
I have actually been through the dispute process with all three of the credit bureaus via their online forms. I can tell you for certain that TransUnion has the best system – because I actually heard back from them after I made the challenges, and they did make the necessary changes. The other two credit bureaus (Equifax and Experian) I heard nothing back. Nada. Zero. Zip. No changes were made.
So, the next option for me was to send in a certified letter to Equifax and Experian. That got results.
Sending in a certified letter:
You will have to spend a little time getting everything together before you send your certified letter in to the credit bureaus.
You will need:
- A copy of your most recent credit report from each credit bureau.
- Make a copy of your credit report, and highlight any missing or incorrect information.
- You will also need to include various forms of identification like a utility bill in your name at your current address, your social security number, and a copy of your driver’s license.
- Gather up any supporting documents you will need. Things like canceled checks showing the credit account was paid in full, credit card statements, police reports (in case of identity theft), court documents or discharge papers (in case of a judgment or bankruptcy).
- Attach a cover letter to the information stating that you are disputing the highlighted items on your credit report.
- Send it certified mail so that you have a delivery receipt.
It’s a lot of trouble to go through, yes, but you could actually raise your credit score considerably just by taking the time to do this.
Your legal rights under the Fair Credit Reporting Act:
- If you dispute an item on your credit report, the credit bureau must investigate, and they are not allowed to charge you for the investigation.
- The credit bureaus have thirty days to investigate your dispute. If, at the end of thirty days the disputed item cannot be confirmed, then the items is removed from your credit report.
- After the thirty day period, the credit bureau is required by law to send you the written results of your investigation.
- Once the investigation is finished, you are entitled to another free copy of your credit report.
Generally when a disputed item is “investigated” it means that the credit bureaus will contact the company or bank that listed the item on your credit report in the first place, and ask them to verify the debt, or status of the debt in question. If the company does not respond to the credit bureau within the thirty day time frame, then the information is removed from your credit report.
It is possible to challenge the same information more than once.
A word of caution: Challenging too many items on your credit report at the same time will cause the credit bureau to freeze your credit report temporarily (until your disputes are settled). If that happens, you will most likely not be able to get a loan during that period of time, because your prospective lenders will not be able to pull your credit report, or your credit score to make a decision on a loan.
People often run into trouble with this because they challenge a bunch of items, and then go apply for a car loan, or a credit card. So, just keep in mind that these disputes are going to tie up your credit report and score for about a month, and don’t apply for anything. If you do, you will not get the loan, and your credit score will drop slightly from the inquiry. Best to wait until everything is resolved, and then move forward with any new loans.
That’s pretty much it. The entire process is really very simple. There is no need, ever, to pay a company to do this for you unless you just really, really do not want to mess with it. Most companies that I have seen charge upwards of $50 a month to challenge items on your credit report for you!
If you want to take care of challenging the bad information on your credit reports yourself, you can click here to download a short, free guide which includes a sample letter of dispute, and the mailing addresses for all three credit bureaus.