Two readers are dealing with credit-damaging errors, but they’ll need to take different paths to correct them.
Finding a mistake on your credit report can happen. While most consumers trust that the Big Three credit bureaus will maintain accurate information about their credit history, errors happen more often than you might think. In fact, the Federal Trade Commission found that one in five consumers had at least one error on their credit report. Even worse, “5 percent of consumers had errors on their credit reports that could result in less favorable terms for loans.”
Why do mistakes happen on your credit report?
Credit report mistakes happen for a range of reasons. Here are some of the most common:
- A credit furnisher reports something inaccurately to a Credit Reporting Agency (CRA), also known as a credit bureau.
- There was a technical issue with a payment that led to a mistake in your credit history.
- You’re the victim of identity theft, and the error is a sign of that theft.
- Negative information in your credit report has expired but was not removed at the appropriate time.
No matter why a mistake appears on your credit report, there are a number of steps you can take to dispute it and correct it. You can dispute credit report errors directly with the credit issuer – i.e. the lender, credit card company or collection agency that issued the information. You can also dispute errors with the credit bureaus.
The right path to take to get a mistake removed often depends on how and why the mistake originated. We received two questions from readers regarding credit report mistakes that show how to navigate this issue in different situations.
Is your credit rating holding you back? Find out how to fix it.
Fixing a mistake on a credit report that a credit furnisher refuses to acknowledge
Question: I have an erroneous hit on my credit which reduced my FICO score from 840 to 724. The company refuses to acknowledge the error. What can I do?
— Dick in Washington
Howard Dvorkin answers…
This is a common problem but if there’s any good news, it’s the when a costly problem becomes widespread, Congress usually steps in to do something. In this case, that something is called the Fair Credit Reporting Act. The FCRA requires the Big Three credit bureaus — Equifax, Experian, and TransUnion — to help you make sure your credit reports are accurate. Here’s how that works for you…
Can I fix my credit report if there’s a big mistake on it?
Can I fix my credit report if there’s a big mistake on it? A reader found a costly error but doesn’t know who to tell. It’s hard enough to get out of debt and build a healthy credit score. So it’s absolutely infuriating when you pull your credit report and see mistakes that dragging down your score.
Over the past two decades, I’ve seen it all. Someone else has a debt but your names are similar so it gets reported as yours. You’ve recently paid off a debt but someone forgot to record the payoff. Some debts might even be listed twice for a bunch of technical reasons I won’t even bore you with. So how do you get the big three credit bureaus to fix mistakes? These massive organizations with intimidating names like Equifax, Experian, TransUnion. Well, thankfully you’re not alone.
Federal law forces these credit bureaus to work with consumers and fix these mistakes. About 5% of all U.S. adults have had at least one mistake on their credit reports at one time or another. There’s a dispute process you can use and I explained it on Debt.com’s website.
I also give advice on how to get the best results, but I’ll share one right now with you. Stay calm. It’s easy to get mad when you have to spend your free time fixing someone else’s mistake. But let’s face it, we’re all human and if you vent to the people trying to help you it can only hurt you. Learn how to dispute your credit reports in the least amount of time at Debt.com.
If a credit furnisher refuses to budge, contact the credit bureaus
When a company refuses to correct the error themselves, you should file a “dispute” with the credit bureaus that issued the report where the mistake appears. Here’s the challenge: If this mistake appears on the reports from all three credit bureaus, you will need to make three separate disputes.
I recommend you go old school and send your dispute by certified mail, with a return receipt requested. It’s called a “paper trail” for a reason, and it’s your best defense.
Provide your name, address, and account number at the top of the letter. Then briefly detail what the error is and what the correct information should be. Include copies of any documentation that supports your case — but keep the originals for your records.
What happens next…
Once a bureau receives your letter, the aforementioned FCRA gives them 30 days to respond to you. That law also says the bureau must verify the information with the creditor. If the information can’t be verified, it must be removed from your credit report.
The credit bureau will then send you a new copy of your credit report, so you can confirm the information was removed. If the information can be verified but you still believe it’s wrong, you have the right to include a 100-word “consumer statement” in your credit report with your explanation of the error.
What to do if this doesn’t resolve in your favor…
I have to tell you, though, that not all mistakes are corrected. If a creditor can verify that what they reported is correct, then the error may remain – even if you know that it’s wrong.
How is that possible? It could be because of an administrative issue with your payment schedule. Here’s a common example:
You made your mortgage payment on time, but your lender reports it as missed. Why? Because the company added an additional flood insurance assessment onto your monthly payment. Even if the assessment was added in error — because the lender did not receive your National Flood Insurance Program policy renewal promptly — the payment technically was missed because you didn’t make the required payment for that month.
These kinds of situations happen, and they can be difficult to dispute on your own and get a successful outcome. So, while you can dispute mistakes on your own for free, in this case it may be better to use a professional credit repair company. You can work with state-licensed credit repair attorneys that have the experience to get the best results possible when making disputes.
Fixing a credit report mistake if you’ve been the victim of identity theft
Question: I have a debt from a credit card that I have been disputing with credit bureaus and the card issuer for years. I cannot get it removed. I have “welcoming” paperwork from the card issuer with an address that was not my legal address due to identity theft. I’ve sent them a copy of my lease with the correct address but still can’t get removed. How can I get this removed?
— Gail in Rhode Island
Gerri Detweiler responds…
When a dispute with a credit reporting agency doesn’t resolve your problem, your next step should be to dispute the mistake directly with the furnished who reported the erroneous information. In your case, that’s the credit card issuer.
You gain an advantage when you dispute incorrect information directly with the credit issuer that’s reporting it. Why? If the furnisher agrees there’s an error, they must report the correction to any reporting agency to which they supplied the information. In other words, they’re required by law to report the correction to all three bureaus. This could save you the extra steps of having to contact each CRA separately if you haven’t already done so.
If that doesn’t work, there’s one more important protection that may apply in your case. If a consumer notifies a CRA that information in their report is incorrect due to identity theft, federal law says that the CRA must block that item and notify the furnisher.
However, they can decline to block the information or rescind the block if the CRA determines that it was blocked in error or if there was a misrepresentation by the consumer.
You didn’t mention what information you provided to verify your claim of ID theft, beyond a copy of your lease at the time. Sometimes, card issuers will want to see verification of the theft, usually in the form of a police report or identity theft affidavit. It’s not always required, but in some cases, it may be necessary to get your claim taken seriously. You can learn more by following Debt.com’s guide on How to Report Identity Theft.
Working to improve your credit? This tool can help you identify potential errors and make disputes. Try it free for 14 days.
Gerri Detweiler has been helping consumers find answers to credit questions for two decades. She’s appeared on the Today Show and Dateline NBC, as well as giving advice to the New York Times, USA Today and Reader’s Digest.
Published by Debt.com, LLC