Why and how should you dispute your credit report errors?
Your credit report says a lot about your credit profile and creditworthiness.
It lists your personal information, credit history, trade information, Social Security Number and what not!
Whenever you approach any lender or a financial institution to take out any new line of credit, your credit report is the first thing that will be scanned, and examined thoroughly.
Plus, this credit report information is used by Vantage Score or FICO to calculate your credit score.
So, you can pretty well figure out how important your credit report is.
A credit report with errors means a bad credit score; which in turn means you’ve got to pay more interest on loans and get low credit limit on credit cards.
These credit report errors could be anything:
Any account information might get misprinted, or misplaced personal information. A credit account showing wrong due balance, or say your payment history is showing false information. It’s also possible that one credit account may be listed twice, which results in account duplicity.
As soon as you see these kinds of false information or any errors on your report, you should dispute them with the respective credit bureau and the concerned creditor.
Why is disputing credit report errors important?
In one line, bad credit report means a bad credit score.
It means a lot of problems in taking out loans and applying for credit cards. Getting a good job, or finding a rental apartment may also get difficult.
No matter how small is the error, or how silly the mistake might seem, it is always advised to dispute them without wasting much time.
Any creditor or lender will hold you as responsible if you apply for credit and your credit report is showing negative or false information.
How to deal with wrong personal information:
It is a very common credit report error.
You can dispute in 3 different ways – Online, over the phone, or mailing a dispute letter straight to the credit bureau.
To be practical, this has nothing to do with your creditors or lenders.
Disputing over the phone is not at all recommended, but you can do so if the error is a minor one.
Disputing online is pretty convenient and takes a lot less time, but you still got to mail copies of original documents for proof reading.
So, my advice is always sending a dispute letter.
Don’t forget to attach your related documents along with, like a copy of your driving license, bill receipts, Social Security card, and anything required.
Hope to get a reply within 30 days from their date of receiving your letter. If you send any other documents meanwhile, expect that verification time to be 45 days.
So have patience.
How to handle old debts:
There is something you got to understand about this whole disputing process.
A pretty common mistake that a lot of people do while disputing the errors, is that they forget to inform the concerned creditor or the lender.
Suppose you see an old debt account is still hanging around your credit report, even if the credit reporting time for it has passed, who is to blame? The creditor or the bureau?
Also, don’t confuse the credit reporting time with the statute of limitations.
Remember, the reporting time limit for any debt is approx 7 years. For Bankruptcy Chapter 13, it is 7 years, and for Bankruptcy Chapter 7, it is 10 years.
So the process is same, you file a letter along with required documents to the credit bureau. This really has a lot to do with your creditor, so remember to send them a copy of your letter and keep them informed.
Keep your letter short and to the point. No need to overcrowd the letter with unnecessary words.
Write the account details you want to dispute. State what should be the actual date and a small write-up stating the reason for the old debt’s removal from your credit report.
Support your letter with all the required documents that bear the proof that this account is old and should be deleted.
If your reasons are legit, then the bureau is bound to mark it off of your report.
What if you have other negative entries:
Of all the errors, the most harassing ones are negative entries like account duplicity, loan or credit defaults, or account information that are not yours.
The process is same.
You send a dispute letter, clearly informing about any false payment listings or anything as such.
If the negative entries are related to civil judgments, bankruptcy, or lawsuits, you are advised to settle the matter first with the court or the agency reporting these information.
Once you are done with this part, you can send a letter to the credit bureau and wait for their reply.
If things get difficult and you are getting no positive reply from the bureau, you can take help of consumer attorneys. They will surely help you out to dispute critical errors.
More tips to remove negative items from your credit reports:
- One method to remove valid negative information from your credit report is by using the pay for delete procedure. You negotiate with your creditor to pay a lump sum and get the negative information removed. However, every creditor may not agree to do so.
- You can also use the goodwill request. You have to state your reason of defaulting or delinquency and may be out of mercy your negative entries will be deleted. Also mention since when you have been current on your payments and go for goodwill deletion.
*N.B: The FCRA(Fair Credit Reporting Act) allows you to dispute any error on your credit report. If the Credit bureau doesn’t respond to your letter of dispute within 30 days, then they are violating the FCRA law. You can sue them if the matter goes out of hand.