Credit report reflects your financial health, your credit worthiness. Whenever you apply for a credit card or auto loan or mortgage, your credit report is viewed by the creditor before offering you the loan. Any wrong or inaccurate information on the report can result in a denial by the lender. Hence, it is of utmost importance that your credit report contains accurate information.
The Fair Credit Reporting Act (FCRA) has given rights to the consumers to dispute wrong information on their credit report in order to get it removed. Here is how you can dispute effectively with the credit reporting agencies.
Order your free credit report: As a consumer you can order your credit report free of cost from all the three major credit bureaus, namely- Experian, Equifax and Transunion, once in every year. You can also order your free credit report from Annualcreditreport.com.
Scan the reports for error: Next, you should check the reports for errors. Make copies of your report while keep the original in file. Highlight all the inaccurate information on the report using a marker.
- Check if your name, aliases, address and SSN have been reported correctly.
- Check if the status of the accounts were reported/updated correctly.
- Check for items that are in your report past their duration, like negative information would stay on your report for seven years; bankruptcy would stay for ten years and such.
Dispute in writing: Once you identify the erroneous information in your report, you should alert both the credit reporting agency and the creditor in writing to get it corrected. You should also attach documents like, canceled checks or bank statements, in support of your claim. You can take help of the sample letter to write to the credit reporting agencies (CRAs). Send the dispute letter through CMRRR (certified mail with return receipt requested). You can also dispute with the CRAs online.
Wait for 30 days: The credit bureau would take 30 days to respond to your dispute. After verifying the information the credit bureau would contact you in writing with the result. If the dispute results in a change, the credit bureau would also provide you with a free copy of your updated report.
Sending demand letter: Ideally the credit bureau should conduct the investigation within 30 days of receiving the dispute letter but if you don’t receive any update after 30 days, you can send them a demand letter. In the demand letter you should ask the CB to remove the item from your report as the official 30 days of probing into the matter is over.
Your credit score can get affected for many reasons but a severe damage can be done to it by wrong items. Keeping the credit report error free would help you in rebuilding your credit faster.