Your credit score is one of the most critical factors in your ability to build certain forms of wealth, be it starting a side hustle to expand your business or having access to more favorable loans or credit cards. This is because your credit score and credit report are factors that lending agencies use to determine your creditworthiness and overall eligibility for loans and other financial products. As such, you must keep an eye on your score to make sure that the credit accounts, late payments, and any other negative information is accurate. One way to ensure that the factors affecting your credit score are true and accurate is to review your credit report, the collection of data ultimately impacting how your score is calculated.
Inaccuracies on your credit report can ultimately impact your credit limit, interest rate, and also hurt your odds of getting approved for an auto loan or mortgage from some lenders. If you see any errors on your credit report—or think that you may be a victim of identity theft—it’s critical that you dispute errors and inaccurate information as quickly as possible, so that you can begin to repair your credit.
So, what are some of the common credit report errors, and how can you fight these errors? Using a few tools and strategies afforded to you by the Fair Credit Reporting Act, the Federal Trade Commission, and the Consumer Financial Protection Bureau (CFPB), it’s possible to initiate an online dispute. If you’re not confident you’ll be able to manage that process on your own, you can also seek out companies who will help you with every step of the dispute process too. Keep reading to learn how to discover errors on your credit report and challenge them with each credit reporting agency.
How to fight credit report errors by yourself
Suppose you want to fight errors on your credit report and improve your personal finances. In that case, the first step is to arm yourself with information. Once you know what the discrepancies are, you’ll be able to know what to include when you submit your dispute form. While the following steps may seem a bit tedious, remember that going through this process can boost your FICO score and scores with each credit bureau—ultimately setting you up for greater success through better approval odds for the loans that matter to you.
Get the facts from Annual Credit Report or another website
There are a lot of good websites out there that can help you obtain your credit report from the major credit bureaus. If you’re looking for a safe option that’s been recommended by the Federal Trade Commission, simply head over to www.annualcreditreport.com. Remember that Annual Credit Report is simply a data furnisher or information provider; the three main credit reporting companies are Transunion, Experian, and Equifax.
When you get to the website, you’ll be asked to enter a few pieces of personal information so that they can find your report. Be ready to provide your current address, date of birth, social security number, and legal name. Make sure that the name you’re using is going to match what’s on your social security card or your tax returns to avoid being given results for someone with a similar name to you.
While you’ll be able to select which credit bureaus you receive reports from, it’s best to just pick all three so that you can compare them to each other. Just because one report seems good doesn’t mean that there couldn’t be an error on one of the other two. Plus, you can use accurate reports from one bureau to corroborate a mistake you’ve noticed in another credit report.
Take a careful look at each of your reports
In order to access your reports, you’ll have to answer some screening questions. These questions are in place to help protect your identity. They’ll usually involve information about credit cards or loans you may have currently open. After completing these screening questions, you’ll obtain access to your credit reports and can download each report to start reviewing your credit history.
As you look at your credit history, it’s important to know what you’re looking for. The good news is that you’re the expert on which credit cards and loans you’ve opened, so as long as you know what to look for, you’ll be able to find any errors in your report pretty quickly. Here’s a quick reference to some of the most common errors you might detect when reviewing your credit reports:
Wrong name or address
While having the wrong name or address isn’t necessarily going to ding your credit, it’s important that your credit report reflects your own personal finances as accurately as possible. Whether you’re named after a parent or have your college dorm address listed as your primary residence four years after graduation, it’s important to get these errors fixed to avoid any future mixups surrounding your credit.
Incomplete information
Sometimes when you’re looking at your credit report, you might realize that something is missing from your report or inaccurately reported in the first place. For example, if you opened a new credit card several months ago that isn’t showing up on your credit report, you’ll want to let the credit bureaus know to add that account to your report. In some situations, it might even be appearing on somebody else’s report, meaning that their credit report isn’t accurate either!
Another example of a way that incomplete information could harm your report is if you have missed payments for payments that were made on time or even via auto-pay online. In these sorts of situations, you’ll want to reach out to the issue of your credit card with documentation that the payment was made on time so that they can correct the error. Having a consistent payment history is key to having a solid credit score, so if you see missed payments that don’t reflect your records, it’s crucial that you dispute these errors.
Identity theft
The scariest—and most serious—of all errors you may find on your credit report is identity theft. Identity theft is when somebody uses your personal information such as your name and social security number to open accounts or take out loans in your name without your consent or knowledge.
If you see loans and credit cards on your credit report that you didn’t open, there are a few things you’ll want to do as quickly as possible. For starters, you’ll want to reach out to your existing bank and lenders to inform them that you’ve been a victim of identity theft. Then, you can start to cancel some of the fraudulent accounts or at the very least freeze them until they can be canceled. You may also want to sign up for credit monitoring services in order to be alerted of suspicious activity in the future. It’s also never a bad idea to go through and change all of your email and online account passwords, just to be certain that nobody has obtained your data via hacking or another sort of data leak.
Unfortunately, some of the time these accounts are opened by parents or direct relatives who themselves are struggling with credit problems and are afraid to say anything. Even if it was a parent who opened an account unbeknownst to you, it’s crucial that you file a report with the Federal Trade Commission and police department. Identity theft can seriously wreck your credit and take years to repair.
How you can dispute errors on your own
No matter how big or small the error you notice on your credit report is, there’s a way to fight it. Disputing errors on your credit report is relatively simple, thanks to the internet. While you’d have to submit a dispute letter to the credit bureau in the past to get your account and report up-to-date, nowadays you can use an online dispute form.
Using an online dispute form takes some of the tedium out of fighting errors on your credit report, but you’ll still need to submit a dispute for each of the three major credit bureaus. That means that you’ll want to head to Equifax, TransUnion, and Experian’s websites in order to make sure that the mistake is corrected at all three bureaus.
Once you’ve submitted your dispute, you’ll need to be a bit patient. This is because your dispute letter or submitted dispute form will trigger an investigation by the credit bureau which could take up to four weeks to be handled. In some situations, the credit bureau may reach out to you for more information. Be prepared to provide additional documentation to corroborate your claim, if necessary.
Costs/Fees
Disputing errors on your credit report shouldn’t cost you any money if you’re doing it yourself. Since Annualcreditreport.com offers one annual credit report a year to users completely free of charge, the only major cost associated with disputing errors on your credit report is the cost of your time.
An important thing to note is that individual bureaus may still ask you to pay to receive your credit score since your credit report doesn’t offer up this information. You don’t need to pay for your credit score if you’re only looking for errors to dispute on your credit report. That being said, even if you are interested in learning more about your FICO score, other websites and banking institutions will offer that information up to you for free. Consider checking out Credit Karma if you’re interested in monitoring your credit score as well as your accounts.
Using a third-party company to initiate your dispute
If you realize upon pulling your credit report that there are many flaws and inaccuracies on your report—or you’ve been a victim of identity theft—it might make sense to employ the services of a third-party company to handle your credit report dispute for you. Especially if you’re looking to get old collections items removed from your report or are trying to actively improve your credit, working with a credit repair company can be a major boon.
Understand the Credit Repair Organizations Act
If you opt to pay for a third-party service to manage your credit report disputes, it’s important to go into the process with a full understanding of how credit repair companies can and can’t help you. Much of what a third-party company can do while representing you in your dispute is governed by regulations set forth by the Credit Repair Organizations Act. Simply put, the Credit Repair Organizations Act outlines that the company you’re working with can’t provide misleading or incorrect information about you to a creditor or credit bureau.
That being said, there are a few other provisions set forth in the CROA that help protect you as a consumer. Some of those guidelines involve the requirement of a written contract with a detailed description of the services the company will be provided to you, as well as a three-day window for you to decide to use or walk away from their service. The Credit Repair Organizations Act also requires companies to receive payment only after their work has been completed, so that you know that you’re getting your money’s worth when using a third-party service to represent you in credit disputes.
Knowing what the CROA allows and disallows can help you better understand when it makes sense to use a third-party agency or handle your credit dispute yourself. This is because there are limitations to what a company can legally provide for you, so in some situations, it may not make the most sense to pay for another company to assist you.
Credit counseling agencies can also provide support
Another option if you’re interested in having third-party support for your credit report disputes is a credit counseling agency. A credit counseling agency can help you manage your debts, create a paydown plan, and help you work with creditors to dispute inaccurate information. One non-profit organization that has a solid representation in the realm of credit counseling is the National Foundation for Credit Counseling, but there may be more local nonprofits in your area offering similar services free of charge or for reduced rates.
When you’re going to be working with another entity in order to dispute errors on your credit report, it’s critical that you do some background research on the company or nonprofit you’re going to work with ahead of time. Unfortunately, there are a lot of companies out there trying to scam consumers and take advantage of them when they’re in need of help. Understanding the provisions set forth by the Federal Trade Commission and the Credit Repair Organizations Act can help you know what pitfalls or red flags to be wary of as you work to repair your credit.
Bottom line
Finding an error on your credit report that’s been negatively impacting your credit score can be disheartening, but you don’t need to stay defeated. Each of the three major credit bureaus offers a straightforward way for consumers to challenge inaccurate information through the internet, and free websites like annualcreditreport.com offer a simple way to receive your credit report from each bureau.
Once you’ve found your credit reports, knowing what to look for is the next step. Take a look at your address, name, and make sure that the accounts and balances that appear on your credit report match what you believe is accurate. If you see suspicious activity, such as an automotive loan or credit card opened in your name that you don’t remember opening, take this discovery seriously and work to file an identity theft affidavit with the appropriate authorities. Even small errors are important to be fixed since they can add to the confusion with your report and ultimately hurt your credit eligibility in the future.
If you’re not feeling confident in your ability to dispute inaccuracies yourself (or you’re overwhelmed by the volume of errors on your credit report), there’s always the option to work with a third-party organization or company to help fight errors on your behalf. Just be sure to understand the limitations of a separate agency when it comes to disputing credit report errors, and recognize that a credit repair company can only assist you with truthful inaccuracies.
Ultimately, there are a variety of ways to go about fixing your credit by fighting errors on your credit report. The internet makes fighting errors by yourself a straightforward and simple process, although it will take a bit of time as you file disputes with Equifax, Experian, and TransUnion. If you feel overwhelmed, you can also reach out to a third-party service to get assistance with filing your disputes. It’s in your best interest to fix any errors you notice on your credit report, so make sure to do so when you have the opportunity in order to improve your personal finances.
Story by Brent Ervin-Eickhoff, Joy Wallet
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