A mistake on your credit report can cause real problems.
A wrong balance or an account you never opened could make a lender think you are a riskier borrower than you really are.
If you are working on your Credit & Debt situation, checking your credit report for errors is one of the simplest places to start.
The good news is that you do not have to accept incorrect information.
You have the right to dispute information that is inaccurate or incomplete.
In the United States you can dispute an error with the credit reporting company and with the company that supplied the information.
This guide explains how the process works and what you should do if the mistake is not fixed.
What kind of credit report errors should you look for
Start by reading your credit report carefully. Do not look only at your credit score.
The details behind the score matter too.
Common errors include
- An account that does not belong to you
- A payment marked late when you paid on time
- A closed account showing as open
- An incorrect account balance
- An incorrect credit limit
- The wrong date for an account opening or payment
- The same debt appearing more than once
- An account where you are listed as the owner when you were only an authorized user
- Personal information that belongs to someone else
The Consumer Financial Protection Bureau lists these types of mistakes among the problems consumers should watch for when reviewing their reports.
Identity theft can also create accounts that you do not recognize.
If that happens the process may involve additional steps beyond a normal dispute.
How to check your credit report for errors
Get a copy of your credit report and go through it line by line.
You can request reports from the three nationwide credit reporting companies which are Equifax Experian and TransUnion.
The Federal Trade Commission says consumers have the right to obtain free copies from each of the three nationwide bureaus once every 12 months.
Do not assume that all three reports contain exactly the same information.
One bureau may show an account or balance that another bureau does not.
When you find something that looks wrong write down the account name account number and the exact information you believe is incorrect. Save a copy of the report too.
That small bit of organization can save you trouble later.
How to dispute an error with a credit bureau
Once you find an error you can dispute it with the credit reporting company that shows the incorrect information.
You should explain what is wrong and why you believe it is incorrect.
Include copies of documents that support your claim.
Do not send your original documents.
For example suppose your credit report shows a credit card balance of 2400 dollars but your statements show that the account was paid and closed months earlier.
You could include the relevant statement and explain exactly what information on the report is incorrect.
The CFPB recommends giving the credit reporting company enough information to identify the account and understand the problem.
If you mail your dispute you can use certified mail and request a return receipt so you have proof that it arrived.
Keep copies of everything you send.
Should you dispute the error with the company that reported it
Yes.
This is a step many people miss.
A credit bureau receives information from companies known as furnishers.
A furnisher could be a bank credit card company lender or another business that reports account information.
Suppose your credit card company incorrectly reported a late payment.
You can dispute the information with the credit bureau and also contact the credit card company that supplied the information.
The CFPB recommends disputing the information with both the credit reporting company and the company that provided the information.
Send the furnisher a clear explanation of the error and copies of documents that support your position.
What happens after you file a dispute
The credit reporting company generally has 30 days to investigate a dispute.
There are situations where the investigation can take up to 45 days.
For example the period can be extended when you submit additional relevant information during the investigation or when the dispute follows a free annual credit report in certain circumstances.
The credit reporting company sends the dispute and relevant information to the company that supplied the information.
That company investigates the information and reports its findings.
If the information is found to be wrong the record should be corrected or removed as appropriate.
You should receive the results of the investigation.
If the report changes because of the dispute you can receive a free updated copy of the report.
A simple example of a credit report dispute
Imagine that Maria checks her credit report before applying for a car loan.
She notices a collection account for a medical bill that she does not recognize.
The account is listed under her name but the address connected to the debt is unfamiliar.
Maria does not simply ignore it.
She gets copies of her credit reports and checks whether the account appears elsewhere.
She gathers documents showing her address history and any information she has about her medical bills.
She then disputes the account with the credit reporting company and the company that reported the debt.
The investigation may show that the account belongs to another person with a similar name.
If that is the case the incorrect information should be corrected.
The lesson is simple. Do not try to explain away an unfamiliar account without checking it.
An account that looks strange may be a reporting mistake or it could be a sign of identity theft.
What if the credit bureau says the information is accurate
Sometimes a dispute does not produce the result you expected.
The company may determine that the information is accurate.
If you still believe there is an error you can provide additional information and continue addressing the issue with the credit reporting company and the company that supplied the information.
You can also ask the credit reporting company to add a statement explaining your dispute to your credit file.
The CFPB says consumers have this right when a dispute remains unresolved.
Keep your records throughout the process.
Your original report dispute letters supporting documents responses and updated reports can all be useful if you need to explain the issue again.
What if the error is caused by identity theft
An account you never opened deserves extra attention.
If you believe someone used your personal information to open an account you can report the identity theft through IdentityTheft.gov.
The FTC provides an identity theft recovery process that can help consumers understand what steps to take.
Do not treat an identity theft problem as an ordinary credit dispute if there is evidence that someone used your information without permission.
Do not pay someone to remove accurate negative information
There is an important difference between an error and information that you simply do not like.
If a late payment is accurate you generally cannot have it removed just because it hurts your credit history.
The CFPB warns consumers about companies that promise to remove current accurate negative information from credit reports.
You already have the legal right to dispute inaccurate information yourself.
That means you should be careful with companies that ask for money to perform a basic dispute that you can file on your own.
What if the problem is still not fixed
If you have completed the dispute process and still have a problem you may have another option.
The Consumer Financial Protection Bureau says consumers generally need to dispute inaccurate or incomplete information directly with the credit reporting company before submitting a complaint about that company to the CFPB.
The CFPB complaint process can be considered after the required dispute process is complete.
You may also want to speak with a qualified attorney if the issue is serious or involves possible violations of your rights.
How to avoid future credit report problems
Checking your report once and forgetting about it is not the best approach.
Make credit report reviews part of your normal Credit & Debt routine.
Look at your accounts and balances and watch for unfamiliar activity.
When you see something wrong act while you still have documents that can help prove what happened.
A useful habit is to keep a folder for financial records.
Save statements payment confirmations dispute letters and responses.
You may never need them again but having them available can make a dispute much easier.
Sources and references
Consumer Financial Protection Bureau
Credit report disputes, common credit report errors, investigation timelines, unresolved disputes, and accurate negative information.
Federal Trade Commission
Consumer guidance on disputing credit report errors, checking credit reports, identity theft, and the responsibilities of credit bureaus and information providers.
Federal Trade Commission
Fair Credit Reporting Act information and the legal framework governing consumer reporting agencies and companies that provide information to them.
Final thoughts on Credit & Debt and credit report errors
Credit report mistakes can affect your ability to borrow money and may influence the terms you receive from lenders.
That is why checking your reports is worth the time.
If you find an error start with the facts.
Identify the incorrect information gather supporting documents and dispute the item with the credit reporting company and the company that supplied the information.
Keep copies of your records and check the report again after the investigation.
Your Credit & Debt situation does not improve by ignoring an obvious reporting mistake.
If something is wrong take the time to challenge it through the proper process.
This article is general educational information for readers in the United States.
It is not personalized financial or legal advice. Rules and individual circumstances can vary.
Consider speaking with a licensed financial professional or qualified attorney for advice about your specific situation.
