It’s always good to know how to dispute a credit report since you can do it yourself and don’t need to pay someone else to dispute a credit report for you. The outcome of disputing a credit report effectively is the removal of erroneous negative entries that caused a bad credit score. Your credit score is based on what’s written in your credit report and decides what kind of risk you pose with someone else’s money. This also decides at what rates people should lend you money. You can save yourself a tidy sum by cleaning up your credit report thereby improving your credit score. Negative entries like bankruptcies, defaulting on loan payments or mortgage payments etc stay on your credit report for up to 10 years. You could also be denied insurance or a loan based on what share your credit report is.
If you do find erroneous entries, you’re allowed to dispute a credit report with the requisite proof in a bid to clean up your credit rating.
The first step to figuring out if there’s an error is to get a free copy of your credit report from annualcreditreport.com. If need be, cross reference them with financial documents like bank statements, bills etc. Anything that’ll help prove your case. Incorrect information could be in the form of lawsuits you’re not involved with or accounts listed in reports that are not yours. They could also be accounts that you’ve closed but are not written as such or listed as open. Another thing to watch out for is entries of late payment. Once you have all this in place, it’s time to file a dispute with a credit reporting companies. Please note, each inaccuracy in your credit report must be disputed separately. It’s best if you get all 3 reports from the 3 credit reporting companies and see where they do not sync.
The Fair Credit Reporting Act (FCRA) allows you to make credit reporting companies remove incorrect negative entries once proven. To dispute a credit report, the second step is to write to the credit reporting agencies and elucidate clearly what in your opinion is incorrect. Along with the letter, attach copies (never originals) of how you can prove that the entry is incorrect. Also, keep copies of your correspondence and send everything by registered post so you’ll have proof of when it was sent and they received it.
The agency will begin the investigation within 30 days of your application. They’ll forward the information you’ve sent to the company that provided the information in the first place so they can check and re-verify their records. It’s important that you follow up constantly but be polite. If they find your claim correct, the negative entry will be removed and you’ll get a much cleaner credit report and a better credit score.
If, for some reason, it isn’t resolved, you can ask them to re-investigate with no additional charge. They’ll have to go back to square one and go through everything again and make a decision. If it is still not resolved (because of inadequate proof etc) you’re allowed a 100 word dispute statement to be tacked on to your credit report so anyone who accesses your credit report can see your point of view. If you truly have defaulted on payment i.e. the basis for the negative entry is correct, there’s nothing you can do about it except keep your credit report clean for everything other than that particular entry so your score doesn’t hit rock bottom. If you still feel that you’re right and the agencies may not have done a thorough investigation or they’re being unfair for some reason, get yourself a lawyer and seek legal recourse. It has been done before; many of them have been successful. All the documentation you’ve saved so far will help you.
Now that you know how to dispute a credit report when it’s inaccurate, there’s nothing to stop you from having a cleaner credit report and a better credit score.