How to Dispute a Credit Report Error in 5 Easy Steps

Errors on consumer credit reports can be a common occurrence. That makes knowing how to dispute a mistake on your credit report important. If you find something in your credit report that doesn’t belong there, here’s what to do.

Step 1 – Identify any credit report errors

Review your credit reports periodically for inaccurate or incomplete information. You can get one free credit report from each of the three major credit bureaus — Equifax, Experian, and TransUnion — once a year at annualcreditreport.com. You can also subscribe, usually at a cost, to a credit monitoring service and review your report monthly.

Some common credit report errors you might spot include:

• Identity mistakes such as an incorrect name, phone number or address.
• A so-called mixed file that contains account information belonging to another consumer. This may occur when you and another consumer have the same or similar names.
• An account incorrectly attributed to you due to identity theft.
• A closed account that’s still being reported as open.
• An incorrect reporting of you as an account owner, when you are just an authorized user on an account.
• A remedied delinquency such as a collections account that you paid off yet still shows as unpaid.
• An account that’s incorrectly labelled as late or delinquent, which could include outdated information such as a late payment that’s over 7 years old or an incorrect date regarding your last payment.
  
• The same debt listed more than once.
• An account listed more than once with different creditors.
• Incorrect account balances.
  
• Inaccurate credit limits.
  

How an error on your credit report can affect you

Is it really necessary to keep close tabs on your credit report? Can one error really have an impact on you? Yes. Your credit report contains all kinds of information about you, such as how you pay your bills, and if you’ve ever filed for bankruptcy. You could be impacted negatively by an error on your credit report in many ways.

To start, it’s important to understand that credit reporting companies sell the information in your credit reports to groups that include employers, insurers, utility companies, and many other groups that want to use that information to verify your identity and evaluate your creditworthiness.

For instance, if a utility company reviews your credit history and finds a less-than-favorable credit report, they may offer less favorable terms to you as a customer. While this is called risk-based pricing and companies must notify you if they’re doing this, it can still have an impact on you. Your credit report also may affect whether you can get a loan and the terms of that loan, including your interest rate.

Step 2 — Contact the furnisher

Your next step is to contact the furnisher, or the company that provided the erroneous information, which could be an entity like your bank or a utility company. Verify their records and confirm the error. You may be able to resolve the issue at this point. If the issue can’t be resolved, contact the credit reporting bureau directly.

Step 3 – Dispute Your Credit Report’s Errors

Under the Fair Credit Reporting Act, both the credit reporting bureau and the company that reports the information about you to the credit bureau are required to accept disputes from consumers — and correct any inaccurate or incomplete information about you in that report.

The U.S. Federal Trade Commission (FTC) recommends taking these actions:

• Tell the credit bureau, in writing, what information you think is inaccurate. The Federal Trade Commission provides a sample dispute letter that makes this step easier. The letter outlines what information to include, from presenting the facts to requesting that the error be removed or corrected.
• Include copies, not originals, of materials that support your position.
• Consider enclosing a copy of your credit report with the errors circled or highlighted.
• Send your letter by certified mail with “return receipt requested” — to ensure the letter is delivered. Keep your post office receipt.
• Keep copies of everything you send.

Where to send your dispute letter

Send your credit report dispute letter to the credit reporting bureau, as well as to the company that reported the inaccurate information about you.

Step 4 – Allow time for the investigation

Credit reporting bureaus must investigate the disputed items. The process usually takes fewer than 30 days. They’re required to send relevant information to the information provider — meaning, whoever reported the disputed item. The provider must investigate the dispute and report back to the credit reporting bureau.

If you’re right — and it is an error — the information provider has to notify the three major credit bureaus so they can correct the information in your credit reports.

A frivolous credit report dispute

The credit bureau or the company that provided the information (the furnisher) also can determine that your claim is frivolous, in which case they can decide not to investigate your claim. But they must let you know they’ve declined to investigate your dispute by written notice within five days.

Step 5 – Follow up after the investigation

Here’s what to expect when the investigation is complete:

• The results of the investigation, in writing, from the credit reporting bureau.
• A free copy of your credit report, if the report has changed.

What about parties who have seen your incorrect information? You can ask the credit bureaus to notify them of the corrections, the FTC says. This includes:

• Notifying anyone who received your report in the past six months.
• Sending a corrected copy of your report to anyone who received it in the past two years.
  

But what if the investigation doesn’t resolve your dispute? If the furnisher continues to report the error, you can ask the credit bureaus to include a statement in your credit file that describes your side of the dispute and it will be included in future credit reports. For a fee, you can usually ask the credit bureau to send a copy of the statement to anyone who has recently received a copy of your report.

Also, if you believe you were treated unfairly or a valid error remains on your credit report, you can file a complaint with the Consumer Financial Protection Bureau. The CFPB is required to forward the complaint to the company with which you have an issue. The CFPB usually will provide you with a response within 15 days.

How long can it take for an error to be corrected on your credit report after the dispute is resolved? Credit bureaus have five business days after finishing their investigation to notify you of the results.

The takeaway

Disputing a credit report mistake is a process that takes time to resolve. It’s important to be organized, disciplined, persistent, and professional. It can be worth the effort. Eliminating errors on your credit report can help improve your credit health and help save you money on loans and credit.