Dispute credit reports efficiently in 4 steps
In US, credit reports are important things to ensure a prosperous comfortable life. Because it contains the information affects your loan approval and how much the respective interest is. Credit companies are subjected to update their clients information to 3 main credit reporting agencies in monthly basis in order to keep this accurate, complete and fair. However, the facts point out that 25% of US credit borrowers encountered one significant error on their credit reports in report of Federal Trade Commission 2012. It reveals another fact that dispute credit reports isn’t uncommon anymore. Hence, there are some main points you should know to protect your credit report with credit bureaus.
Step 1: Get your free credit report frequently
According to Fair Credit Report Act (FCRA), a borrower is eligible to claim a free credit report from each 3 main credit bureaus, Experian, Equifax and TransUnion, once in a year. You can order one or two or all three reports at the same time. Yet the best practice for you monitoring your credit issue all year long is to claim your credit report once in each 4 months.
You’re required to provide some personal information such as full name, address, date of birth, Social Security Number which are matching with the current report. Furthermore, they would ask you some other questions related to financial status like credit limit to verify your identity. All needed information, you can find at annualcreditreport.com or call to 1 877 322 8228.
Step 2: Check some common errors
When getting a credit report, you can point out errors on your report. These mistake can affect your credit score or fraud alert so you should crawl all points. There are some common mistakes including:
- Wrong name
- Wrong address or outdate address
- Wrong occupation information
- A credit card or debt or loan isn’t under your shoulder
- A late payment or bankruptcy or bad debt is more than 7 years old
- A wrong notation in closing an account by lenders
- A debts by your ex-spouse after divorce
- An account was discharged after filling bankrupt is still active
- A payment has been done but showing as unpaid.
Related story: What is in your credit report?
Step 3: Dispute credit reports to credit bureaus
You should write a letter pointing out the error information to your credit reporting agencies. A proof supporting your position is mandatory. On dispute letter, you should should list all inaccurate items you dispute, a reason/ fact & figure you consider this item’d need to be corrected.
The check-list you should send to declare your position:
- Dispute letter (Download a template here)
- A copy of your credit report
- Proofs or documents supports your statement.
In next 30–45 days, should your proofs are strong enough, the credit bureau will proceed the investigation based on your dispute letter. In this process, the credit bureau will cooperate with the lenders providing your credit information for a review. The information providers must investigate your stated items with relevant facts to validate them properly and report back the result to credit reporting agencies. The agencies will correct the changes in your credit report and send you a free copy. In case your dispute isn’t successful, you can ask the credit reporting companies state this dispute in your file.
Related story: What determine your credit score?
Step 4: Depute errors to information providers
This action will boost your dispute process and the needed package is totally the same as sending to credit bureaus.
Again, to dispute credit reports you must send dispute letter, a copy of wrong credit report and evidences. The information providers investigate the dispute items and send the result to you by the mailing address (checking your address before dispute is also important). And if you hold a right position in dispute, the information provider must notify the credit reporting agencies to update these items.
It’s important to detect errors on your file as well as dispute credit reports to credit reporting agencies because it would have a huge impact on your financial health and credit score. Nobody wants to own a lower position which leads a bigger interest rate and debt, so watching our your credit report and following the steps accurately will help you more than you imagine.