How to dispute credit report errors
Before you set up a plan on how to dispute credit report errors, it's important to mention that No one can legally remove accurate and timely negative information from a credit report. If you find inaccurate or incomplete information on your credit reports, your first step is to contact the lender (furnisher). You may be able to straighten out the matter with the lender either because it actually does find an error or to maintain good customer relations, and the lender will report the updated information to the credit bureaus.
If contacting the lender doesn't correct the error in your credit report, Federal law gives you the right to submit a dispute and request an investigation with the 3 credit reporting agencies (Equifax, Experian, and TransUnion).
Under the Fair Credit Reporting Act (FCRA), both the credit reporting agency and the information provider have responsibilities for correcting inaccurate or incomplete information in your report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no fee for the investigation and it doesn't cost anything to question or dispute items in your report.
If you were recently denied credit because of information in your credit report, contact both the credit reporting company and the company that provided the information also referred to as the furnisher. Explain in writing what you think is wrong, and why. Include copies of documents that support your dispute.
Considering the cost of bad credit, it just makes good sense to dispute and correct all negative entries in your credit report. We will provide you with a step by step guide of the dispute process and ways to write effective dispute letters.
Credit Dispute Steps
In order to preserve your legal rights under the Fair Credit Reporting Act (FCRA), the following dispute strategies are highly recommended.
1. Never dispute online
Although it may look convinent, Do not use the online disputing service provided by the Credit Bureau because that online process will put you at a disadvantage every time you use it. Record keeping and documentation is very important when it comes to credit repair. The Credit Bureau online disputing service will not provide the kind of record you need for your disputes.
2. Never dispute over the phone
The credit bureau recommends you call them with your dispute. Calling the credit bureau with your dispute is something you never want to do. Disputes over the phone do not provide documentary support of the dispute in the event you need to follow up a failed dispute with lawsuit. During your dispute process, you need to keep accurate time-stamped records. Calling in your dispute will put you at a disadvantage by leaving you without a proper paper trail, and you can find yourself cornered by the credit bureau into certain waivers, which may result in you giving up your right to a re-investigation.
2. Never use the Credit Bureau dispute form
When you receive your credit report, you'll also find a dispute form enclosed with your report. Do not use this form to send in your dispute. The credit reporting agencies form tends to narrow and limit your dispute options. These forms discourage you from submitting a detailed dispute and tend to provide a list of choices via a "check box" format choices.
How to Dispute Credit Report Errors
The proper and most effective way to dispute items on your credit report is to mail in a dispute letter to the Credit Bureaus (via Registered or Certified Mail - return receipt). Your dispute letter should include:
1. Contact information for you including complete name, address, and telephone number
2. Report confirmation number, if available
3. Clearly identify each mistake, such as an account number for any account you may be disputing
4. Explain why you are disputing the information
5. Request that the information be removed or corrected
6. Enclose a copy of the portion of your credit report that contains the disputed items and circle or highlight the disputed items. You should include copies (not originals) of documents that support your position.
Tell the consumer reporting company, in writing, what information you think is inaccurate. It's recommended that you send a photocopy of your credit report with the items that are inaccurate circled and a number put next to each item. Use those numbers when you describe your dispute in your letter to the credit reporting agency. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each mistake in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected.
Sending your dispute letter by Registered or Certified Mail and asking for a return receipt greatly increases your chance of a response. It also helps you document that your letter was received. Keep a record of when you sent the dispute letters and what date you should expect a response. This is very important because it gives you some leverage with the credit reporting companies in case they don't respond in the time frame required by law. If you have not received an answer to your dispute after 30 to 37 days, write the credit bureau with a certified return receipt letter, for an updated credit report demanding the disputed items be deleted. If the bureaus do not reply within the 30 days, it must be that the information was either inaccurate, or it could not be verified. In either case, according to the Fair Credit Reporting Act, the items must be immediately deleted.
Consumers have found it possible to eliminate negative marks on credit reports simply by going through this process of disputing items over and over again. Since many creditors won't take the time to defend the negative item, eventually you can "repair" your credit through default by your creditor not responding to the Credit Bureau request to verify the item. This commonly occurs. The creditors do not always have time to deal with a bothersome piece of paperwork and that is your advantage.
Research has shown that certain items are easier to remove than others.
Easier items to dispute and have removed
Items older than 2 years
Accounts that were late but are now paid off
The reason these items are easier to remove is simple, when you dispute an older account or an item that is now charged off, the creditor is not too concerned with the account any more. They may not even be able to find the necessary information to verify the dispute. Even if the account was once seriously past due, but now is paid off, they usually will not take the time to verify the dispute since they have already been paid.
More Difficult Items To Dispute And Have Removed
Accounts that are currently past due
IRS or State Tax Liens
Current collection accounts
These are more difficult because creditors keep these types of accounts in their current files and they are expecting you to pay them. That is why it will be much easier for them to verify the information and keep the item on your credit file. However, it is always worth a try.
Important: It is completely legal for you to dispute items on your credit file even if you know they are correct. You are simply testing to see if your creditors have maintained the proper records to verify the dispute. You have a very bad memory and forgot that the negative accounts on your credit file are really yours.
Federal Laws require that the Credit Bureau verify all disputes. If they are unable to verify your dispute, the law says it must be removed from your file.
What the Credit Bureau Don't Tell You
Each item on your credit report must be proven or it cannot remain in the report. If the credit bureau cannot verify the item when investigated, it must be removed from your file whether or not it's true.
Every negative entry on your report can be denied or challenged at any time. The bureau must reinvestigate and if that item cannot be verified within a "reasonable amount of time", it must be removed from the file.
Items when challenged can be mistakenly erased. Consumers say they often experience computer operator mistakes.
Many times the creditor does not re-verify in time or the credit bureau is busy and does not handle your dispute properly. It must then be deleted.
The older an item, the more difficult re-verification is. It is possible it cannot be verified because records may no longer exist after 1 or 2 years.
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Tip of the day!
Never dispute online or over the phone