How to Dispute a Credit Report Error

How to Dispute a Credit Report Error

June 8, 2022

According to the US Federal Trade Commission (FTC), one out of every five American customers detects errors in their credit reports. These errors can be personal information errors, data management faults, balance problems, and so on. The main issue is that these inaccuracies lower the credit score and make customers appear less creditworthy than they actually are.

To avoid such problems, we should check our credit reports at least once a year. Credit report agencies Experian, TransUnion, and Equifax, provide our credit report free of charge once a year. So let’s take a look at some specific credit report errors and try to dispute them after spotting them in our report.

Personal Data Errors

Sometimes credit bureaus can mix up one client with another; thus, credit records may contain wrong information. Identity or personal information errors are common examples of such instances. Some of the most typical identification errors to watch out for are spelling mistakes (name, middle name, surname, address) and contact information errors (phone number, email address). 

Clerical Errors

Clerical errors occur when different customers have the same name, causing agents to mix up the information and include someone else's information on your report. These inaccuracies might have a negative impact on your credit utilization ratio and credit rating; therefore, you should notify your creditor as soon as possible.

Balance Errors

Errors might occur in the real status of your accounts as well. Missed and late payment dates are among the most concerning of these errors. Due to balance errors, you may find yourself defaulting on your obligations. The following are the most frequent balance errors:

  • An opened account is closed, and vice versa.

  • Account payments that are made on time are listed as late or overdue.

  • The credit limit is incorrect.

  • Debts of seven years or more (Please keep in mind that while discharged debts should be deleted from your credit record, bankruptcy would be reported.)

Credit Report

How to Dispute Credit Report Errors

Under the Fair Credit Reporting Act (FCRA), both the company that reports data  (called the “furnisher” of the information) and credit reporting agencies are responsible for correcting inaccuracies on credit reports. Everyone should know what to do if they detect something in their credit report that doesn't belong there. The Federal Trade Commission (FTC) of the United States proposes the following actions in case of detecting errors in your credit report: 

  1. Inform the credit bureau in writing of any incorrect information. The notice should specify what information is incorrect and demand that the error be deleted or fixed.

  2. Send them copies of the detected errors with underlined or highlighted inaccuracies, not the originals.

  3. Send your letter with "return receipt requested" to guarantee that it is delivered, and keep your post office receipt.

  4. Make and keep copies of everything you submit.

Note that you should send your credit report dispute letter to both the credit reporting bureau and the entity that reported the incorrect information. 

Investigation Process

Call credit reporting agencies within 30 days to follow up on your dispute and determine what action they have taken. If you are right, and there is an error in your report, the information source must contact the three main credit bureaus so that the data in your credit reports are corrected immediately. Typically, an investigation takes less than a month. 

After the Investigation

When the investigation is complete, and the results are ready, customers should be notified in writing by the credit reporting bureau. If the report has been updated, you should also receive a free copy of your credit report.

The Federal Trade Commission (FTC) of the United States advises consumers to request that credit bureaus notify the companies who have viewed your incorrect info of the revisions and to provide a corrected copy of your report to anybody who has seen it in the last two years.

If Your Dispute Isn’t Resolved

Unfortunately, even if the information is incorrect, a consumer's dispute may not result in the repair of an inaccuracy. If the furnisher continues to report the inaccuracy, you can request that the credit agencies add a note in your credit file that details your side of the dispute, and it will appear in future credit reports. You may also request that the credit bureau send a copy of the statement to anybody who has lately obtained a copy of your report. 

You can submit a complaint with the Consumer Financial Protection Bureau if you think your issue was handled unfairly or if the error stays on your credit report. The CFPB is obligated to forward your complaint to the firm with which you are having a problem. After completing their inquiry, credit bureaus have five business days to notify of the results.  Typically, you will receive a response from the CFPB within 15 days. 

If you are still unable to resolve an issue after submitting several disputes to credit reporting agencies, you might consider engaging a lawyer. Note that it is essential to find an attorney who has handled FCRA litigation on behalf of customers.