Disputing Errors on Your Credit Report: Can it Lower Your Credit Score?
Summary:
Filing a dispute—has no impact on credit scores in and of itself. But, if a dispute results in a change to your credit report, the results could change your credit score.
What is a credit dispute?
A credit dispute is a process where you challenge inaccurate, incomplete, or outdated information on your credit report. You can submit a dispute with the credit reporting agency, creditor or collection agent who will then investigate the claim and either update the information, remove it, or verify that it is accurate.
The goal of a credit dispute is to ensure that the information on the credit report is correct and reflects the consumer’s true credit history.
Is it legal to dispute negative items?
Yes, it is legal to dispute items on your credit report that you believe to be inaccurate, incomplete, or outdated. Under the Fair Credit Reporting Act (FCRA), consumers have the right to dispute information on their credit reports with the credit reporting agencies and the entities that provided the information.
Credit reporting agencies are required to investigate the dispute and either update, remove, or verify the information within a certain time-frame. Disputing inaccurate information on your credit report is an important step in maintaining an accurate credit history and improving your credit score.
Source: FTC – Fair Credit Reporting Act
Should I Dispute with the bureau, creditor, or collection company?
When you want to dispute an error on your credit report, you should generally start by contacting the credit bureaus. The credit reporting agency is responsible for investigating the dispute and contacting the creditor or collector to verify the information.
If you have specific information that the error is coming from a particular creditor or collector, you may also want to contact them directly to inform them of the error and request that they correct it. This can be particularly helpful if the creditor or collector is reporting inaccurate information to multiple credit reporting agencies.
It’s important to note that you don’t necessarily have to choose between disputing with the credit bureau, creditor, or collector. You can file a dispute with the credit bureau while also contacting the creditor or collector to inform them of the error. Additionally, if the dispute is not resolved after filing with the credit bureau, you may need to escalate the issue to the creditor or collector to ensure that the error is corrected.
How to write a good dispute letter?
If you need to dispute an error on your credit report, you can write a dispute letter to the credit reporting agency. There is no magic dispute letter, just make sure you have the necessary information.
Here are some tips for writing a good dispute letter:
Be clear and concise: State the error you are disputing and provide specific details to support your claim.
Provide documentation: Include copies of any documentation that supports your dispute, such as a copy of a billing statement or a credit report from another agency that shows different information.
Be polite and professional: Avoid using a confrontational or aggressive tone, and focus on providing the facts of your dispute in a clear and objective manner.
Include your contact information: Make sure to include your name, address, and phone number so that the credit reporting agency can contact you with any questions or updates.
Request a correction: Clearly state that you are requesting that the credit reporting agency correct the error and provide a specific explanation of what you want to be changed.
Include ID: Proof of address and social
Keep copies: Make sure to keep a copy of your dispute
Need help disputing errors?
Drop us a line and we’d be happy to guide you through the process.
Where to send your disputes:
Equifax:
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374
Experian:
P.O. Box 4500
Allen, TX 75013
TransUnion:
TransUnion LLC
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016
Things to be cautious of:
There aren’t too many downsides to filing a dispute. However, there are two important things you need to be aware of:
- Some home loan lenders will not approve a loan while items are currently in dispute. So that’s something you need to plan for ahead of time
- Your state’s statute of limitations (SOL). A state statute of limitations on debt is a law that sets a time limit on how long a creditor or debt collector has to file a lawsuit to collect a debt. The length of the statute of limitations varies by state and by the type of debt. Once the statute of limitations has expired, the creditor or debt collector can no longer sue to collect the debt. Here’s where you need to be cautious: If you’re nearing your state’s statute, say within 6 months +/- disputing with a collector could prompt him to go to court to seek a judgment. If this happens, your problems could have just gotten worse.
You can just google “Statute of limitations on debts in [your state]”
What if they don’t remove inaccurate items?
If the credit bureau does not remove an inaccurate item from your credit report after you have filed a dispute, there are several steps you can take:
Re-dispute: On occasion, credit bureaus do make mistakes. If they fail to respond or accidentally verify an inaccurate debt as accurate, you simply have to re-dispute it. Include copies of your previous dispute and any proof you have and it should be fixed the second time around.
Contact the lender directly: Your lender will have more information about your account than the credit bureaus and may be able to help you more than the bureaus. Your lender’s contact information will be in your results summary and your credit report.
File a complaint: Consider filing a complaint with the Consumer Financial Protection Bureau (CFPB): The CFPB is a government agency that helps protect consumers from unfair or deceptive practices by financial institutions. You can file a complaint with the CFPB if you are having trouble getting inaccurate information removed from your credit report.
Consider hiring a credit repair company: If you are still having trouble getting inaccurate information removed from your credit report, you may want to consider hiring a credit repair company. These companies can help you dispute errors on your credit report and work to improve your credit score.
Look into legal remedies: You are protected under the Fair credit reporting act. If you are sure the item is incorrect, and have given proof, you do have legal recourse.
Here is a resource should you decide to take that route.
It’s important to note that removing inaccurate information from your credit report can take time and may require persistence and patience on your part. However, taking steps to correct errors on your credit report can have a significant impact on your credit score and financial well-being in the long run.
Conclusion:
Disputing errors on your credit report is your right, and an essential step in ensuring that your credit score accurately reflects your financial history. By carefully reviewing your credit report and taking steps to correct any inaccuracies, you can improve your credit score and financial health.
It’s important to remember that it can take time and persistence, but the effort is well worth it in the long run. By taking proactive steps to maintain an accurate credit report, you can be in a better position to achieve your financial goals and improve your overall financial well-being.
Frequently Asked Questions
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