My credit report notes that I work for a financial services company that I left in 2006. My wife’s showed several variations of her name, one that had somehow mixed with her mother’s name giving her a brand-new middle name. While it’s not fun to review your credit report, finding (and removing or repairing) errors is important if you plan to apply for a home mortgage or even sign up for a credit card.
Common types of mistakes
Credit report mistakes include incorrect personal information, such as misspelled names or outdated addresses. Another common mistake is the inclusion of accounts that don’t belong to you or inaccurate account balances. Be on the lookout for late payments or collections that are erroneously reported as well.
How credit report errors affect you
A mistake on your credit report may lead to a lower credit score, which can result in higher interest rates on loans or credit cards. This can make borrowing more expensive and potentially limit your access to credit. It can also influence your ability to secure housing, employment, or favorable insurance rates.
Review your credit report
Obtain a copy of your credit report: you are now entitled to check your credit at each of the three bureaus (Equifax, Experian, and TransUnion) once per week. Carefully review the report, paying close attention to every detail. Look for errors in your personal information, account details, payment history, and any other relevant information.
Document mistakes
When you spot a mistake on your credit report, it’s crucial to document it properly for dispute purposes. Make a list of all the errors you found and gather supporting documents, such as bank statements, payment receipts, or correspondence with creditors. Having a well-organized record will make it easier to present your case and ensure that all necessary information is included in your dispute.
Dispute errors with the credit bureaus
Begin by contacting the credit bureaus in writing. Clearly explain the error, provide supporting evidence, and request that the mistake be corrected. Be sure to send your dispute via certified mail with a return receipt to maintain a record of your communication. The credit bureau is then required to investigate your dispute and respond within a specific timeframe.
Note: You may think that the credit bureau will be able to find the error once you point it out to them. However, so there isn’t any question, send in a copy of your credit report pages that show the error, and circle it.
The Consumer Financial Protection Bureau notes that two of the three bureaus (Equifax and TransUnion) have forms you may download to accompany your letter. They also provide a template letter if you have any issues writing one on your own.
What to expect from the credit bureau
Once you have submitted a dispute, the credit bureau will begin its investigation. This may be limited to an internal check of basic data (such as your name or home address) or involve outside companies that submitted the incorrect information. They will forward your supporting documents to those companies and will respond once a decision is reached.
They can also declare your dispute as frivolous and simply decide not to take any action at all. Credit bureaus must also inform you of that decision.
Verify that the corrections have been made
After you’ve heard back from the credit bureau, check your credit report closely. Make sure the mistake has been corrected and any erroneous information removed.
Dealing with credit bureaus even for small mistakes can take an inordinate amount of time and patience. However, keeping errors out of your report will make purchasing a house or applying for a credit card much easier.
Photo by Francesco Ungaro