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How to Find Errors in Your Credit Report

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This is part 2 of a 4-part series on credit. If you missed part one, you can read it here

 

You know the benefits of regularly viewing your credit report and tracking your score. But what about errors? Do you know how to look for them on your report? Or, what to do if you find them?

 

Errors on your credit report can significantly lower your credit score, costing you money in higher interest payments, higher insurance premiums, lost job opportunities and more. That’s why it’s so important to keep a watchful eye. The good news is that errors can usually be corrected—if you know how to spot them.

 

The first step
Get a copy of your credit report to see what is currently being reported. According to the Fair Credit Reporting Act, all Americans are entitled to one free credit report from each of the three major credit bureaus—Experian, Equifax and TransUnion—each year. Visit AnnualCreditReport.com to download these reports for free.

 

What to look for
Once you have your report, check for the following:
 

  1. Identification fields—misspelled name, addresses where you’ve never lived or the wrong middle initial are common errors. Sometimes it’s just a typo. But, even then, it can open you up to a world of serious credit problems if you start seeing someone else’s accounts on your credit report. It’s best to fix these as soon as you see them.

 
  1. Accounts—This is where the real damage can be done. Look through each account listed to examine the data. You’re looking for accounts you don’t recognize, incorrect credit limits, inaccurate late payments and any loan marked as “open” when it should be listed as “closed.”

 
 

On the road to fixing any mistakes
No matter how big or small the mistakes are, they should be addressed right away. The best way to do this is to contact the bureau that generated the report directly. Here are tips to get it done:

 
  • Gather supporting documentation—Once you’ve identified the errors, don’t contact the credit bureaus right away. First, do your research and make sure that things are as you think they are. Collect the documents you need—for example, an email or letter stating the loan in question is closed or a current credit card statement that clearly shows your credit limit.


  • Write a letter of dispute—Be sure to include each contested item with an explanation of the facts. If you need help, myFICO.com has a sample letter. You can use the same letter for each reporting bureau, just update the recipient information.


  • Make copies of everything—Before you mail off your papers, make copies for each bureau as well as one set for yourself. Decide what your file system is going to be—a folder, a binder or something else—and set it up now. That way, you’ll know exactly where your documents are when you need to reference them.


  • File your dispute—Disputes can be filed online, over the phone or via the post office. Mountain America Credit Union recommends using the post office. If the problems continue or the dispute ends up in court, the paper trail that’s generated shows your efforts and could be the thing that tips the verdict in your favor. Send your documents via certified mail and request a return receipt. This will notify you that your package was received and includes the date and signature of the person who accepted it.


  • Follow up in 30 days—Once the post office has notified you that your packet has been received, set up a reminder to follow up in 30 days if you haven’t heard from the credit bureau. If your dispute is successful, the company who reported the information is required to notify all three credit bureaus so they can correct the information in your file.


  • Take additional steps—You may get the news that your dispute was unsuccessful. If so, it’s usually due to one of these reasons: the information currently in your report was deemed correct or the dispute was considered frivolous. If the information is deemed correct and you don’t have additional documentation to prove otherwise, your best response is to take steps to rebuild your credit. If your dispute is labeled frivolous, you may have too many items in one letter, insufficient proof to support your claim or possibly even be using the same excuse for every error. If you receive this reason for why your claim was rejected, try to submit your dispute again.


  • Monitor your account—You’ve worked hard to correct your report and you don’t want to have to do it again, right? That’s why it’s important to review your credit report regularly. You may also want to talk with your financial institution or an outside company about purchasing ID protection services.

 

This is part 2 of a 4-part series on credit. If you missed part one, you can read it here

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