Lenders look at your credit report to determine whether you qualify for a loan or credit card. Inaccurate information could lead to an unfavorable interest rate or outright denial of your application. You should periodically request copies of your credit reports and check them for errors. If you find a mistake, act immediately to have it corrected so it doesn’t hurt your chances of obtaining credit.
How an Error Might Have Occurred
If you have a common name, your records could have gotten mixed up with someone else’s. If you are divorced, a joint account that you had with your former spouse might not have been removed from your credit report, even if it was supposed to be according to your divorce settlement. Someone might also have made an error when entering your personal information. An account might be listed on your credit report more than once, or an account that was closed might not have been removed. In a more extreme scenario, someone might have stolen your identity and opened a fraudulent account in your name.
How to Dispute an Error
Under the Fair Credit Reporting Act, credit bureaus are required to investigate any alleged errors reported by consumers, unless those claims are deemed frivolous. If you find what you believe to be an error, write to the credit bureau or fill out an online form. Explain what you believe is incorrect and provide copies of any documents that support your position. If you send letters via the postal service, mail them certified and request receipt confirmation. Keep copies of all letters you send to the credit bureau and any responses you receive.
You should also contact the company that provided the information to the credit bureau and explain why you believe it is incorrect. Include copies of supporting documents and state that you have filed a dispute with the credit bureau.
The credit bureau should complete its investigation within 30 days. In many states, a consumer who disputes an error is entitled to receive a free copy of a new credit report showing that the mistake has been corrected.
If the credit bureau does not agree that there is an error in your report, you can ask it to include your statement disputing the information in your file. Your statement can be provided to anyone who received your credit report recently or who will in the future. You may have to pay a fee for this service, but it can be worthwhile if it helps you avoid getting turned down for a loan or credit card. If you suffer harm as a result of an error on your credit report, you may need to hire a lawyer to help you resolve the issue.
Check Your Credit Reports
An error on a credit report can prevent you from achieving your financial goals. Request free copies of your credit reports and check them for errors. If you find any, take steps to address the situation as soon as possible.