According to estimates from the Federal Trade Commission (FTC), as many as one out of every four people in the United States has a mistake on his or her credit report. An error on your credit report could be devastating to your finances, as you could end up being denied a loan or being charged a higher interest rate just because of incorrect information on your credit report. Since employers and landlords also use your credit report in background checks, and since your credit score can even affect your auto insurance costs, a mistake on your report could cost you in many very real ways.
Because of the serious consequences associated with a mistake on your credit report, it is essential that you fix errors as soon as possible. This means knowing the right steps to take in order to resolve problems with your report.
How to Fix Errors on Your Credit Report
The first step to fixing errors on your credit report is finding out that a mistake exists in the first place. You can check your credit report for free one time each year with each of the three major credit bureaus (Equifax, Experian and TransUnion). If you space apart your three free reports, this means you can check your credit every few months and always keep up-to-date about what is on your report. The website where you need to go in order to obtain the free annual credit reports from the credit bureaus is called Annual Credit Report.com.
If you check your credit report and a mistake has been made, you can complete a form with the credit bureau that has the incorrect information. Each of the three different major credit reporting agencies has their own forms where you can submit a dispute about the information on your report:
- To dispute an Experian claim, click here
- To dispute a TransUnion claim, click here.
- To dispute an Equifax claim, click here.
You only need to dispute the error with one credit reporting agency, but you may wish to contact all of the different agencies that have the incorrect information in order to ensure that you get the mistake removed from your credit report as soon as possible. When you dispute a mistake on your credit report, you should provide detailed information and supporting documentation that clearly illustrates why the information on your credit report is in error. For example, if a creditor is reporting that you didn’t pay a debt when you did, you could show your statement with a $0 balance and/or include the cashed checks repaying the debt. If you dispute your claim via mail, make sure you keep copies of any of the supporting documentation that you have submitted.
After you’ve submitted the dispute, the credit bureau must begin an investigation within 30 days unless the dispute was obviously a fraudulent one. The credit bureau will contact the creditor to try to clear up the mistake. If the creditor cannot prove that the information is correct, then it can be removed from your credit report. You will have the right to receive a new copy of the report and have a new copy sent to those creditors who recently denied you credit on the basis of the errors on your report.