How to File a Credit Report Dispute
Your credit report is supposed to be the last word on your habits as a borrower. But what if something unexpected shows up? Mistakes on credit reports do happen, and they are relatively common. A Federal Trade Commission (FTC) study found that 26% of participants had at least one error on their report that could damage their credit score.
“While inaccurate information may not always have a negative impact on your credit score, it could stand in the way of your financial goals,” said Bruce McClary, vice president of marketing, National Foundation for Credit Counseling (NFCC). “For example, someone else’s credit card or loan account appearing on your credit report in good standing may not help if you are trying to qualify for a new loan because it may lead the lender to believe that you already have more debt than you can affordably handle”.
Luckily, there is recourse for those whose credit reports include erroneous information: filing a dispute.
How to file a credit report dispute
The Fair Credit Reporting Act (FCRA) gives consumers the right to know what is on their credit report and to dispute any inaccuracies. It also requires reporting agencies to correct or remove any information that is found to be wrong, or that is incomplete or unverifiable, typically within 30 days.
It is the consumer’s responsibility to initiate the dispute process with the three main credit agencies, Equifax, Experian and TransUnion; an amendment to the FCRA entitles consumers to a free copy of their credit report, at their request, once every 12 months from each of the credit reporting agencies. You can get yours at AnnualCreditReport.com.
The dispute process is a little different for each of the agencies, and an error that shows up on one report might not appear on the others. Consumers are advised to dispute each error separately.
How to file a dispute with Equifax
An easy way to file a dispute with Equifax is through its online system. You can dispute erroneous personal information (name, address), incorrect account information (like paid debts that still show a balance), duplicate debts (a single account listed twice) and any information indicating potential fraud. You will need to provide identifying information and upload documents in support of your dispute, which may include a valid driver’s license, a current utility bill, a current bank statement or any evidence of identity theft.
Equifax recommended consumers gather as much evidence as possible and provide details about errors on the report.
You can also file a dispute by phone at 866-349-5191 or by mail at:
P.O. Box 740256
Atlanta, GA 30374-0256
How to file a dispute with Experian
Consumers who spot errors on their Experian report can file a dispute online. Experian recommended that consumers provide as much detail as possible and upload any relevant documentation.
You can also submit your dispute by phone at the number displayed on your credit report or by mail at:
P.O. Box 9701
Allen, TX 75013
How to file a dispute with TransUnion
According to TransUnion, the fastest and easiest way to handle inaccuracies on your credit report is to use its online credit report dispute website.
TransUnion asks that consumers have several pieces of information on hand when filing a dispute: your TransUnion file number, which you can find on your credit report; identifying information, including current address, date of birth and Social Security Number; the company name and account number related to disputed items (also found on the credit report); reason for the dispute; and any corrections to personal information.
TransUnion also recommended providing supporting documentation for any disputes, including any information related to discharged accounts, canceled checks that show an account has already been paid or police reports that may have been filed because of identity theft.
You can also file your dispute by phone at 800-916-8800 or by mail at:
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016
How does a dispute affect your credit score?
Simply filing a dispute has no direct impact on your credit score. However, there are a few potential outcomes of the dispute that could result in a score change.
Removing erroneous late payments could cause the score to jump. According to Equifax, one payment that is 30 days late could lower a high credit score by more than 100 points.
In some cases, however, disputing an error on your credit report could cause your score to drop. Let’s say your report still shows a canceled credit card account as active. If removing that account shortens your credit history or raises your credit utilization ratio, it could cause your score to drop.
Corrections to personal information, on the other hand, like your name or address, do not affect scores.
A word of caution to mortgage applicants: Open credit card disputes can pose problems for homebuyers. Trying to qualify for a mortgage is one of the likely reasons a consumer might be looking to dispute information on their credit report. But doing so could have unintended consequences. Items in dispute with credit reporting agencies are labeled as such, and while the open dispute won’t harm your score, lenders may see it as a red flag because they are not getting the full picture of your credit history. Your lender or financial professional should be able to advise you about whether to proceed with a dispute.
What to do after a dispute is resolved
Once a dispute is resolved, consumers will want to take extra care with maintaining their scores, especially if there was fraud involved. Doing more frequent credit checks to look for inaccuracies is a good first step. Consumers may also want to consider credit monitoring services that alert them to any changes in their report.
The bottom line
No matter how careful you are with your payments and credit limits, mistakes on your credit report can still damage your score. Should your credit reports indicate errors or fraud, there are steps you can take to fix them. By law, the three credit reporting agencies have to investigate if consumers file a dispute. This process can be initiated easily on their websites and may lead to an improvement in credit scores. But you can’t dispute errors you don’t know about, so remember to keep on checking.