You spotted an inaccuracy on one of your credit reports. It's kind of like noticing a new mole on your body: it isn’t something that should be ignored. A single error on your credit report can negatively affect your ability to get a loan, rent an apartment, buy insurance or apply for a job. A discrepancy could also indicate that you’ve fallen victim to identity theft.
So, what do you do when you detect erroneous information on a credit report? Here are three steps you can take right now.
Step 1: Assess the extent of the error by reviewing each of your credit reports.
You have three different credit reports, one from each of the major credit reporting agencies- TransUnion, Equifax, and Experian. Each of these credit reporting agencies are required by the Fair Credit Reporting Act to provide you with a free annual credit report through the website www.annualcreditreport.com. Jump online and pull a current copy of each of your credit reports.
Now that you have the credit reports, carefully review them. Keep an eye out for errors of any kind. Watch for mistakes like:
Misspellings of your name;
An incorrect address, date of birth or Social Security Number;
Creditors you don’t recognize;
Incorrect balance amounts;
Late payments you don’t recognize; and
Same debts listed twice.
Circle or highlight discrepancies on each report and make copies of the pages on which they appear.
Step 2: File disputes with the credit reporting agencies.
The Fair Credit Reporting Act gives you the right to inform the credit reporting agencies that you disagree with the information on your credit reports. There are several ways for you to initiate a dispute: You can call. You can also either submit your dispute online or via U.S. mail. We recommend sending disputes by certified U.S. mail. When sending your dispute, make sure you:
Provide your contact information including complete name, address, and number;
Include your report confirmation number, if available;
Identify each mistake, such as an account number for any account you may be disputing;
Explain your basis for disputing the information;
Include a copy of your credit report that contains the marked disputed items;
If you are disputing an identity theft issue, provide a copy of the FTC Identity Theft affidavit or police report;
If you have any proof that the information appearing on your credit report is in fact an error, be sure to include the such documentation; and
Request that the information be removed or corrected.
Step 3: Dispute the error with the furnisher of the information.
It is always the best policy to ALSO dispute incorrect information directly with the creditor or third party that provides information about you to a credit reporting agency. However, a dispute to a furnisher will NOT give you a right to seek legal relief if the furnisher mishandles your dispute. Only a dispute sent to the credit reporting agency gives you the right right to pursue your legal rights.
What happens after you dispute information on your credit report?
Credit reporting agencies are required to investigate your dispute, forward all documents to the furnisher, and report the results back to you unless they determine your claim is frivolous. If the furnisher or credit reporting agency determines that your dispute is frivolous, it can choose not to investigate the dispute so long as it sends you a notice within five days saying that it has made such a determination.
If the furnisher corrects your information after your dispute, it must notify all of the credit reporting agencies to whom it sent the inaccurate information. This allows the credit reporting agencies to update their reports with the correct information. If the furnisher instead determines that the information is accurate and does not make changes, you can follow up with a request that the credit reporting agencies include a consumer statement explaining the dispute in your credit file. This statement will appear in future credit reports.