Simple Steps to Disputing Credit Report Errors

Understanding the Components of Credit Reports

Credit report errors are quite common, which makes knowing how to dispute them very important. But how exactly can a credit report error affect you, and what do you do if it happens to you? If you find something in your credit report that you believe is incorrect, continue reading below to learn how to dispute your credit report properly.

How a Credit Report Error Can Affect You

Is it truly necessary to keep a close eye on your credit report? Can one mistake have a drastic effect on your credit report? The answer is yes. 

Your credit report includes all types of information about you, such as the way you pay your debts, and if you’ve ever filed for bankruptcy. One mistake on your credit report could negatively misrepresent your ability to handle your finances.

It’s also imperative that you see how credit reporting agencies sell credit report data to other companies that utilize this information to evaluate your creditworthiness. 

How Common are Credit Report Errors?

Finding errors in credit reports are quite common. In fact, the leading criticism of the Consumer Financial Protection Bureau in 2016 was regarding errors found in credit reports. While some of these errors are relatively benign, like a misspelled name or the listing of a former address, other credit report errors could hurt your credit and your credit score in more impactful ways. 

Credit report errors can cost consumers tens of thousands of dollars over their lifetime if they go unnoticed. Fortunately, as a consumer, credit laws are on your side when an error does cost you money.

Credit reporting agencies have a responsibility to provide consumers with accurate information regarding their credit reports and are required to provide a dispute process so that consumers can have their credit reports corrected promptly.

Under the Fair Credit Reporting Act, in the event that you dispute an item in your credit report and the credit reporting agency cannot confirm the accuracy of the item being disputed or if the item is proven to be inaccurate, the credit reporting agency is obligated to remove the item from your credit report.

The Fair Credit Reporting Act gives credit reporting agencies and furnishers 30 days to complete their investigation and remove the items being disputed. In some instances, that time can extend to 45 days under certain conditions, but is dependent on several limiting factors.

How Credit Report Errors Occur

Credit report errors can occur for several reasons. The four common causes of credit report errors often include: 

Mixed Files

Mixed files occur when someone with the same or similar name applies for a line of credit, and their record gets mixed with another consumer’s file.

Identity Theft

Identity theft occurs when personal information has been stolen, and a new account has been started with that person’s identity. While this often occurs due to no wrongdoing of the consumer, it is particularly challenging to eliminate from a credit report.

Furnisher Errors

In terms of credit reporting, there are three major players that each play a unique role in the process: the credit bureau, the consumer, and the data furnisher.

The furnisher is responsible for supplying credit bureaus with the consumer information that appears on the credit report. In some instances, a furnisher reports inaccurate information, such as a missed payment or a collection that belongs to a different consumer.

Re-Aging of Old Debts

Certain debts have a limited amount of time that they appear on your credit report. Re-aging occurs when a debt is sold to a third party collector, and the collection date to the debt’s clock is incorrect, causing your credit report to reflect the error.

How to Dispute Credit Report Errors

Step One: Identify the Errors

Be sure to review your credit reports periodically. You are allowed to receive one free credit report from each of the three major credit bureaus per calendar year. Additionally, you can also subscribe to a credit monitoring service that will examine your credit report monthly.

Step Two: Contact the Furnisher

If you find an error on your credit report, you should first contact the furnisher. Contacting the furnisher (companies that provide information about a consumer’s credit history) will help you verify their records and confirm the error.

In some instances, you could be able to solve the error at this point.

Dispute errors on your credit report

Step Three: Send Your Dispute to the Credit Bureau

If you are unable to resolve the error with the data furnisher, you will then want to contact the credit bureau directly.

In writing, provide the credit bureau with the information you believe to be inaccurate. Be sure to clearly state what you believe is incorrect, explain why, and include copies of any materials that support your dispute.

Additionally, with SmartCredit’s Action Button, you can easily raise a dispute with any errors in your credit report or inquire about a transaction you have questions about all in one easy-to-find location*.

Step Four: Wait for the Investigation to Conclude

Once you’ve sent your dispute to the credit bureau, the only thing left to do is wait. Typically, this process takes fewer than 30 days to investigate the dispute and report the findings to the credit reporting agency. 

Step Five: Follow-up with the Credit Bureau

While the credit bureau is obligated to complete its investigation in 30 days, in some instances, the investigation can take up to 45 days to complete.

If the investigation results in no changes to your credit report, you can file an official complaint with the Consumer Financial Protection Bureau, and they will contact the company with which you are submitting the dispute. In this instance, you should receive an answer within 15 days.

See an Error with Your Credit Report? Contact SmartCredit Today

While disputing a credit report seems tedious, it’s vital that you promptly dispute any errors. Whether you have plans on buying a house or opening a new line of credit, errors in your credit report could drastically affect your chances of favorable results in either scenario.

The good news is that the dispute process isn’t overly complicated, and it could help improve your financial wellbeing and help save you money in the future.

If you see an error with your credit report, contact SmartCredit today to effectively and efficiently dispute your credit report error. Sign up with SmartCredit today to take back control of your credit report.

*Results and timing of results may vary depending upon your circumstances.

Understanding the Components of Credit Reports

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