9 Steps to Removing Credit Report Errors

Checking your credit reports on an annual basis is a must in this day and age of rampant credit fraud and identity theft, specially since there is a fairly good chance that your credit reports will have one or more mistakes more than once in your lifetime. Think about that!

• A study done by the Federal Trade Commission found that 25% of all consumers have an error on their credit report that negatively impacts their credit score. 

The study also showed that 80% of people who challenge items on their credit report are able to get at least some of the negative information altered or removed. That’s great news! 

Follow this process to get these errors corrected: 

1.    Get copies of your credit report from the three major bureaus. You can get a free copy of each report each year from AnnualCreditReport.com. If you’ve recently been rejected for credit, you’re also entitled to a free copy of the report containing the derogatory information from the creditor that denied you credit.

2.     Get your official credit scores. It would be a shame to do all this work and not know how much of an effect your efforts had on the metric that matters the most. I personally have a subscription to MyFico.com simply because the ability to access both my credit reports and FICO Score all in one place and have live credit monitoring is of great value to me.  

3.     Find and highlight all the errors that are harming your credit score. Some people challenge all the negative information, whether it’s accurate or not with great results but beware of doing so online. You give up a lot of right and protections under the FCRA when you don't dispute errors in writing via certified mail, return receipt requested to document your records but more on that later.

4.  Write a dispute. Your dispute can be very simple. Provide enough information that the credit bureau can identify you and the item you’re disputing. In general, it’s most effective to declare that you were never late or that the account isn’t yours. MyCreditSystem gives you access to all the dispute letter templates you need once you become a member. 

5.  Mail your disputes via Certified Mail Return Receipt Requested. The credit bureaus are on the clock from the time they receive your credit dispute in writing. 

• If they can’t complete their investigation within 30 days, they basically have to make the changes you requested. Include only one dispute per letter. 

• The credit bureaus would love for you to file your dispute online. It saves them time and  money because it automates the process. What's more it usually doesn't resolve your issue favorably. Receiving your letter is much more cumbersome for them. So send your complaints via the postal service.

6.   WATCH THE CALENDAR 

• Their response must be postmarked within 30 days of receiving your letters.

7.   Evaluate the responses you receive back. It’s very likely that some of your disputes will be resolved in your favor. It’s also likely that some will not. 

• One credit bureau has been known to simply give you what you want without investigating at all!

8.  Continue disputing all the negative items. At the end of the day, the credit bureaus exist to make money. They make money by selling credit reports, not by dealing with consumers. Your disputes cost them money. With a little diligence, you’re likely to get your way, so be persistent. 

• Consumers have historically done well when suing the credit bureaus. It’s difficult for them to truly verify the information in your credit reports. If you’re not satisfied with the results, consider filing a claim in small claims court. Credit bureaus get fined $1,000 per infraction. You’ll likely settle out of court and get your credit report cleaned up.

9.  Stay organized. Maintain records of all your correspondence. Make copies and keep those copies filed in an organized manner. Be sure to keep track of dates. 

Fixing the errors on your credit reports is simple, but it does take time. It’s important to check your reports every year and whenever possible subscribe to a credit monitoring program. 

The cost of credit reporting errors can be staggering, as they can dramatically increase your interest rates on any loans you receive, credit cards and insurance rates. 

A BAD CREDIT REPORT CAN PREVENT YOU FROM GETTING HIRED OR EVEN RENTING AN APARTMENT.

Request your credit reports today and spend the time to examine them carefully. Consider making it a part of your annual financial housekeeping and if you want to make sure your credit is repaired correctly become a MyCreditSystem member and doing it yourself. 

You can do it and it will change your life.