Mistakes in your credit report reduce your overall financial health by messing up your credit score and hamper your chances of securing your loans or credit cards. It is, therefore, important to correct them at the earliest opportunity for your credit history to reflect the truth.
Here’s how to dispute errors correctly, gather all supporting documents, and write a good dispute letter.
Step 1: Review Your Credit Report
First, you have the right to dispute mistakes in your credit report only after thoroughly reviewing them for any errors. Once a year, you can request one free credit report from each of the big three credit bureaus—Equifax, Experian, and TransUnion—from AnnualCreditReport.com. Look for mistakes such as inaccurate personal information, accounts that are not yours, wrong status on accounts, or information that’s past its deadline for reporting.
Step 2: Identify the Errors
Once you have your credit reports, carefully identify any errors. Common errors include:
- Incorrect personal information (name, address, Social Security number)
- Accounts that don’t belong to you
- Incorrect account statuses (e.g., an account reported as delinquent when it’s current)
- Duplicate accounts
- Incorrect credit limits or loan amounts
- Incorrect account balances
- Outdated negative information
Step 3: Gather Supporting Documentation
To dispute the errors, you’ll need to provide supporting documentation that proves the information on your credit report is incorrect. Gather documents such as:
- Copies of your credit report with the errors highlighted
- Bank statements or account statements showing the correct information
- Proof of your identity (copy of your driver’s license, Social Security card, etc.)
- Any correspondence related to the account (e.g., letters from creditors)
- Any other relevant documents that support your claim
Step 4: Write an Effective Dispute Letter
Your dispute letter explains the error and provides evidence to support your claim. Follow these tips to write an effective dispute letter:
- Include Your Personal Information: Start with your name, address, and contact information. Clearly state that you are disputing information on your credit report.
- List the Errors: Specify each error you found on your credit report. Include the account number, creditor’s name, and a brief description of the error.
- Explain Why It’s Incorrect: For each error, explain why the information is incorrect. Be clear and concise.
- Request for Correction: Ask the credit bureau to correct or remove the incorrect information.
- Attach Supporting Documentation: Reference the documents you’ve attached to your letter and explain how they support your claim.
- Sign and Date: End your letter with your signature and the date.
Sample Dispute Letter
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Step 5: Send Your Dispute
Send your dispute letter and supporting documentation to the credit bureau that issued the incorrect report. It’s recommended to send your dispute via certified mail with a return receipt requested, so you have proof that your dispute was received.
Step 6: Follow Up
The credit bureau has 30 days to investigate your dispute and respond. They will contact the creditor who provided the information, and if the creditor cannot verify the accuracy, the credit bureau must remove the error. Once the investigation is complete, the credit bureau will send you the results and a free copy of your updated credit report if a change was made.
Conclusion
Asserting those errors in the credit report is one of the very essential ways to lead a financial report to be in good health. Carefully viewing the credit report, collecting its supporting documentation, and drafting an effective dispute letter can ensure that you correct your report to showcase the right items. Those may help you avoid falling prey to the destructive impact of errors on credit reports, resulting in a hit on your savings.
