There are few experiences in life more frustrating than discovering an error on your credit reports. The experience is extra frustrating if that error is damaging your credit scores and preventing you from qualifying for financing. Thankfully if an error does appear on your credit reports there are several steps you can take to try and resolve the problem. Take a look at the 4 steps below which may be helpful if you ever find yourself in the unfortunate situation of trying to correct credit reporting errors.
Step 1 – Assess the Extent of the Damage
Your first course of action should be to assess the full extent of the errors so that you can make an appropriate plan to resolve it. Remember, you have 3 different credit reports, one from each of the 3 major credit reporting agencies (CRAs) – Equifax, Trans Union, and Experian. You should pull a current copy of each of your 3 credit reports to see if the errors are localized to one of your reports or if it has spread across all 3 of your credit reports.
Remember, you have the right to a free credit report from each of the 3 CRAs once every 12 months via the website AnnualCreditReport.com. Thoroughly reviewing all 3 of your credit reports is extremely important because unless you identify a credit reporting error there is no obligation for the credit bureaus to correct it.
Step 2 – File Disputes with the Credit Reporting Agencies
The second step is to send a dispute directly to the CRAs. Thanks to the Fair Credit Reporting Act (FCRA) you have the right to notify the CRAs anytime you disagree with or question the information appearing on your credit reports. When the CRAs receive your disputes they have 30 days (45 days in certain circumstances) to contact the data furnisher (aka creditor or collection agency) that is reporting the disputed information and investigate the account. The goal of the investigation is to determine whether or not the information is being reported correctly and if it must be removed or amended accordingly.
There are several ways for you to initiate a dispute and inform the CRAs that you disagree with the information on your credit reports. You can submit your dispute online, via U.S. mail, or over the phone. Remember, if the error is appearing on all 3 of your credit reports then you will need to initiate a separate dispute with each of the CRAs individually. Additionally, if you have any proof that the information appearing on your reports is indeed an error it will be helpful to include that documentation along with your letter or online dispute.
Step 3 – File Disputes with the Creditors
Sometimes disputes with the CRAs will not work out in your favor. If the data furnisher verifies that the information appearing on your credit reports is accurate and informs the CRAs as much then the disputed information will not be deleted from your credit reports. However, just because your disputes with the CRAs do not end in a favorable manner that does not mean you are without any other potential remedies.
The FCRA also gives you the right to dispute any information you believe to be inaccurate with the data furnisher directly. You can initiate a dispute with a data furnisher by calling or writing the creditor or collection agency and informing said company that you believe incorrect information is being reported by them to the CRAs. Just like the CRAs, your data furnisher will also be required to complete a reasonable investigation into the alleged error.
Step 4 – Notify the CFPB
If you have disputed an error with both the CRAs and with the data furnisher but the inaccuracy still remains on your credit reports then there is a third option you have the right to pursue. The Consumer Financial Protection Bureau (CFPB), created in 2010 with the passage of the Dodd-Frank Act, also accepts disputes from consumers regarding alleged credit reporting errors. The CFPB has even created an online complaint database, where you can also upload any documentation supporting your claim, which allows you to initiate and track a dispute if you believe an error has appeared on your credit reports.
The CFPB has enforcement authority over the credit bureaus as it pertains to the accuracy of their information. And while contacting the CFPB won’t guarantee a correction, it is akin to bringing your bigger stronger brother to the fight.
Note: All of the above strategies are free and will cost you nothing more than your time.