This summer I have received numerous inquiries about how to correct mistakes on a credit report. They will take you some time but for the most part you should be able to correct any errors you find. Your credit history is an important factor for obtaining a loan, renting an apartment, and sometimes getting a job. However, it’s not uncommon for a credit report to contain mistakes. For example, your credit report may show an unpaid medical bill for services that were paid by the insurance company. It may show a student loan with monthly payments even if you paid off that loan last year. Your report might have an account on there that is not even yours.
These are mistakes you can correct. In fact, you have the right to get mistakes corrected at no charge. If left uncorrected, mistakes could hurt your chances of reaching other financial goals. So, what do you do?
1. Order your free credit report
Your first step is to order and review your credit report from all three of the major credit reporting agencies (Experian, Equifax and TransUnion) to see which of your credit reports has mistakes. Because they are three separate companies, each credit reporting agency can have slightly different information. You can order free copies of your credit report from all three agencies at Annual Credit Report online or by calling 1-877-322-8228. Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting agency every 12 months.
2. Follow all instructions provided
If you discover an error on your credit report, follow the instructions provided with your report on how to correct. You can report errors to any of the credit reporting agencies by:
- calling the credit agency
- using the dispute portal online when you get your credit report
- sending a written letter, including documentation, to the appropriate agency
3. Provide documentation
Send any additional information that is needed to correct the error. The reporting agency will tell you what you need to send. They may request a copy of a cancelled check or the paid in full statement from the creditor. Get in the habit of keeping your financial records in order so it’s easy to show where a mistake has occurred.
In the medical example above, call the medical provider to confirm that the insurance company paid the bill. If so, have them send you a copy showing it paid in full. Also, ask the hospital or doctors office to send a letter of explanation to the credit reporting agency. To correct the student loan problem, send the credit reporting agency a copy of the document proving the loan was paid with a letter asking for a change to your record.
If an account is not yours, first contact the creditor listed on the credit report. Request more information about the account to help you determine whether the account belongs to you, is the result of identity theft, or simply reported in error. You can dispute the information if you determine the account does not belong to you. If you think it’s fraudulent, include in your explanation that you believe the account may be related to identity theft. You can dispute the account as fraud and ask the credit agency to add a security alert to your credit report. That alert will notify creditors that your information may have been compromised. A preventative step you can take is to have a security freeze placed on your credit report account. This stops any new company wanting to extend you credit from looking at your report and score. No more pre-approved credit cards in the mail! It is a simple step to freeze and unfreeze if the needs arises.
4. Explain the issue
Explain the problem in a brief letter. The agency must investigate your complaint within 30-45 days and respond to you with its results. As part of the investigation, the credit reporting agency will check with the creditor whose information you are questioning. If the agency finds that the information in the credit report is incorrect, the creditor must notify the other major credit reporting agencies of the error so they can update their information.
5. Contact a creditor if unresolved
Contact the creditor directly if the credit reporting agency disputes the error and you still believe your credit report is inaccurate. When you resolve the dispute, ask the creditor to send a correction to the credit reporting agency.
6. If still unresolved, tell your side of the story
Write a consumer statement of your side of the story if the issue remains unresolved. You may write up to 100 words to explain the situation. Employees of the credit reporting agency are often available to help you write your statement. Your statement will appear on your credit report moving forward.
Keeping up with your credit report information is as important as your bank information now. With the rise in identity theft and human error while inputting information it’s good to double check. I receive a free of charge email from Experian notifying me anytime something changes to my report. It can be “great job, your score increased” or “no new events to your report this month”. It’s reassuring to receive these throughout the year.
As always, if you have questions reach out to me and have a wonderful September!!