How to File a Credit Report Dispute

Your credit report contains important information about you. In addition to tracking your credit history, it also lists the addresses where you’ve lived, whether you have been sued or arrested, or if you have taken a bankruptcy or gone through a foreclosure.

Each time you apply for credit, whether for a credit card, car loan, or mortgage, potential lenders use your credit report to determine the risk they will incur by extending you credit. If your credit history is good and your credit score is high, this tells them that you are a financially responsible person who knows how to manage debt.

On the other hand, if your credit history is less than perfect and your credit score is low, creditors see this as a warning sign and usually will deny your credit application. If they choose to approve your request, they will most likely attach severe penalties such as unfavorable loan terms and extremely high interest rates.

So it’s easy to see why reviewing your credit report at least once a year is recommended by many financial advisors and consumer advocate groups. The information contained in your report is too important to leave to chance.

By law, you are entitled to one free copy of your credit report from each of the three main credit bureaus once a year. These are TransUnion, Experian, and Equifax. You can order your copy either over the phone or from their respective websites.

Once you receive your reports, it is important to check them thoroughly. The information should be accurate, complete and up-to-date. It’s especially important to do this before applying for any type of major credit, such as a car loan or mortgage. If there are any inaccuracies or mistakes on your credit report, it is important to clear them up before applying for new credit.

Periodically reviewing your credit report also lessens the chance you will suffer the harmful effects of identity theft. This is when someone posing as you, and having your personal information (including social security number), opens various credit accounts and proceeds to charge the maximum amount on all the accounts and then never makes a payment. Unfortunately, the creditors have no way of knowing that this isn’t really you. Consequently, all of the delinquent payments are reported to the credit bureaus under your name and added to your credit history.

Inaccurate information can severely limit your ability to obtain credit, purchase insurance or even get a job. It is your responsibility to make sure that the information contained in your credit report is accurate and true.

If you find that you need to dispute information on your credit report, you should alert both the credit bureau and whichever creditor provided the information, in writing. You should include copies of any statements or cancelled checks that support your claim. Your letter should list your full name, complete address, the specific information that you are disputing, and the reason that the information is not accurate.

Be sure to mail your credit report dispute using certified mail with the return receipt requested option. You will receive a notification card showing who signed for your letter and when it was received which will act as proof that you sent your dispute letter to the proper agency. Be sure to keep this card, along with a copy of your letter and all other pertinent documentation, in a safe place while you are going through the dispute process.

The credit bureau is required to investigate your dispute and provide you with the results, in writing, within 30 days. All documentation which you send is forwarded by the credit bureau to the creditor issuing the inaccurate information. They are also required to investigate and report their findings to the credit bureau.

Once the investigation has been completed and the information has been determined to be false, the credit bureau must remove all items related to this inaccurate information from your credit report. Once this has been done, your credit score should improve.

Your credit report plays a key role in determining your financial situation. It’s up to you to take responsibility and control of this important aspect of your financial life. Review your credit report periodically and act quickly to resolve any inaccuracies or other false information. Don’t assume that everything is correct. Find out for yourself.

For more suggestions on using credit wisely, check out Credit FAQs.