Credit Disputes

Reported by the Federal Trade Commission 25% of people have an error on their credit. Errors can range from misspelling of your name to late payments for a credit line that never existed. These errors can potentially lead to thousands of dollars worth of interest charges over a lifetime. It is important to take immediate action on any errors you find.

Initiating a Credit Dispute

By law, and At your request, credit bureaus will initiate an investigation of any credit information that you challenge. The Fair Credit Reporting Act is the accuracy of information in the files of the credit reporting companies and its statutes obligate the three major credit bureaus to investigate the items in question.

When you find an error on your credit report:

1. Send a letter to the Experian, TransUnion, and Equifax

Each bureau has a process in place to dispute inaccurate information on their individual credit report. On the dispute form you will:

  1. Clearly identify each item that you challenge.

  2. Explain why you challenge the information and go into detail.

  3. Request that the negative item is removed or corrected.

2. Contact the data furnisher

The data furnisher is the creditor, lender, collection agent or financial institution that furnished the information to the credit bureaus. Date furnishers are obligated to follow the statutes in the Fair Credit Reporting Act. To take advantage of all your rights under this law, contact both the bureaus and the data furnisher.

If the furnisher has reported a late payment or incorrect debt amount, you could try contacting them directly. In cases of incorrect personal information, it should primarily be reported to the credit bureaus.

3. Wait for the response

Typically you will receive a response from the credit bureau within 30 days.. Once they complete their investigation, they have five days to report the results back to you. You can expect the same timeframe for a response from a data furnisher, although if they stand by their claim, they won’t remove the error. The credit bureau must provide the results in writing and give you a free copy of your report if the dispute results in a change.

It is important to note that credit bureaus are not obligated to investigate a claim they decide is “frivolous,” For instance, a credit bureau may find your claim frivolous if you:

  1. submit inaccurate or incomplete information on the dispute

  2. try to contest the same item multiple times without new evidence

  3. attempt to claim everything on your credit report is inaccurate, without proof

  • In these cases, the credit bureau is only required to communicate the reason for deeming the dispute frivolous within five days. If you have updated materials, you can try to submit the dispute again.

4. Review the results

If the information you challenge is verified as accurate by the data furnisher, the item will remain on your credit report. Otherwise, the item will be updated or deleted.

If you disagree with the results of the dispute, you can contact the data furnisher directly (if you haven’t already). Their contact information is on your credit report. You can also add a statement of dispute that appears next to the line item whenever your report is accessed by a lender. Some lenders only look at numbers but it may help, for example, if a potential landlord pulls your report during the tenant approval process.

5. Check updates on your credit score

Filing a dispute has no impact on your score; however, your credit scores could change if information on your credit report changes after your dispute is processed. For example, removing a mistakenly reported late payment could improve your credit score. Updates to personal information have no impact on your score.

Common Mistakes to Avoid When Filing a Credit Dispute

When filing a credit dispute there are a few mistakes that people commonly make. These can stall the process and if done incorrectly, can end up hurting you more than helping.

Not all information can be disputed

Only information that is inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear can be challenged. Anything that is accurate, even though it may be negative, cannot be formally challenged with the credit bureaus.

Failing to read the terms of agreement

Additionally, few of us take the time to read through the terms of agreement when purchasing or accepting a “free credit report.” The terms of use may include an arbitration clause, which essentially means that you forgo your right to make a claim against the credit bureau in court.

Credit Disputes and Your Credit Score

It is important to challenge inaccurate negative information on your credit reports as this information can negatively impact your credit score. It is best to have your credit reports as accurate as possible before applying for a mortgage, car loan, insurance or even a job.

A lower credit score resulting from inaccurate negative information on your credit report can unfairly prevent you from qualifying for a loan, keep you from getting approved for a low-interest rate, cause your car insurance premiums to increase, or come between you and a new job.

Because of the difficulties many people run into when disputing inaccurate items with the credit bureaus, many customers have turned to Rapid Credit, the trusted leader in credit repair. Rapid Credit provides credit bureau disputes as well as a number of other credit repair services designed to help you make the most of your credit.

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