Why should you care about checking your credit report for errors? Or know about how to dispute credit report errors when you find them?
Because having good credit makes it easy to rent an apartment, buy a new home, or get a new car loan.
But when an error is made on your credit report and you don’t know about it, it can be a big let down and stressful situation because you will be denied for a credit application and have no reason as to why.
Did you know that approximately 1 in 3 American adults don’t check their credit report regularly for errors? It’s a staggering thought right?
On top of that, the Federal Trade Commission (aka, FTC) even admits that credit report errors are more common than people think. In one of their published reports, they found that one in five consumers admitted to getting an error fixed.
Check out the article here: FTC Study Credit Report Accuracy
Imagine all of the credit report errors that go unreported.
Below, I’ll briefly discuss what you can do to stay on top of keeping your credit report clean from reporting errors.
Step 1: Get A Free Copy Of Your Credit Report
Not many people know how to get a free copy of their actual credit report.
There are no tricks and no gimmicks either to getting a free report. You see some time ago, the FTC passed a law that allows any consumer to get one free copy of their credit report every year.
Since that law passed it has been very easy for me to check my credit report every year using the website called Annual Credit Report (you can use this site too and get a free credit report.)
NOTE: It will ask you to verify one of your credit account numbers and some other personal information to properly identify you. Asking for this information is normal and not a scam.
After you verify, you’ll get a free copy for all three of your credit reports, one report from each credit bureau; which are:
The only thing I do not like is that you will not get a credit score rating. But, we’ll discuss how you get that for free in the next section.
Step 2: Your Credit Score & How To Check It For Free
The credit scoring model that banks and lenders use to calculate your credit score is called FICO, it stands for Fair Isaac Corporation, and you can view the company here: Fico.com
Equifax and Transunion are still using a variation of FICO, but Experian recently branched out to their own solution that uses a similar model as FICO called the FICO® Score 8 model.
Regardless of which scoring system is being used, generally speaking, credit score ranges vary, here’s a broad overview of how the credit score scale works:
- 500 – 600 This number range is for poor credit.
- 600 – 720 This number range is for good / very good credit.
- 720 – 850 This number range is for excellent or perfect credit.
The underwriters will have a more accurate credit score range and model for approving loans, and they most likely will give you very little or no information about how they make decisions on approvals!
How To Get a Free Credit Score
My favorite websites for checking my credit score for free are:
Unfortunately, you will not get an actual FICO score, these free websites will utilize a score based on a model from Vantage instead. It should be a very close estimate to your actual FICO score though.
If you want an actual credit report with your Fico scores it will cost you money. Usually around 40 bucks for all three reports. Or you can sometimes get a copy for free from a financial institution when they run a credit check for you (normally after they process a loan application for you.)
Step 3: How To Verify Errors On Your Credit Report
In step 1 you got a free copy of all three credit reports from annualcreditreport.com. As you review them, look for any wrong information that sticks out.
This credit report is all about you, make sure it’s accurate.
First and Foremost; Pay close attention to all of your credit accounts that are opened or closed. And any recent inquiries or public records!
The most common errors to look for are:
- Late Payments that are over seven years old.
- Credit accounts that don’t belong to you.
- Account’s you’re not a co-signer on.
- An account that is closed directly by you, but it shows the provider closed it.
- You decided to pay off a debt belonging to a collections company, and they still show it as unpaid.
- A tax lien that is over 7 years old is still showing up.
- Charged off accounts that were included in a bankruptcy.
- Your personal information is incorrect; Such as your home address, employment records, income, etc.
The list goes on and on so don’t be afraid to question or research anything that looks wrong or suspicious.
If you don’t see any errors, then congrats, there’s nothing else to do. Most of the time, I find myself not seeing any errors, and it’s a huge relief.
If you did see errors, go to the next step.
Step 4: Dispute Credit Report Errors
(If you were lucky and did not see any errors on your report, you can skip this step!)
The frustrating thing about disputing credit report errors is that the entire process can take anywhere between 30 – 60 days. You have to directly dispute with each credit bureau separately as well. That means you’ll send a separate letter to each one.
Here’s a list of links for filing disputes directly with each credit bureau.
When filing a dispute, you’ll typically provide the following information:
- Your Name, Address, and Phone number.
- The credit bureau’s Name and Address.
- You will clearly identify the mistake and an account number. You’ll also include a confirmation number if one is available.
- Statement of why you’re disputing the information reported.
- Provide a copy or show documentation such as your credit report or other documents showing the highlighted item that you are disputing.
EXAMPLE OF A DISPUTE LETTER
[Your Name and Address]
[Your Date Of Birth]
[Credit Bureau Name & Mailing Address]
To whom it may concern:
I am writing to inform you about an error I noticed on my [insert the credit bureau’s name here] credit report, the account number is: [account number].
- Date of the item being disputed: [put the exact date of the item here]
- Description of dispute: [add a brief description describing what is showing up and why it’s not correct or not accurate.]
- Enclosure: (list any supporting evidence you have such as a bill or statement showing the posted item as being correct.)
I am requesting that you remove this information from my credit report.
Thank you for your help.
[sign your name here]
After you send all the required documents in the mail, you will have to wait to hear back on the status for each dispute you filed. In the most extreme cases, I’ve gotten errors fixed in 90 days or less. For others that I personally know, it’s taken them up to 120 days to resolve a credit error dispute.
The most important thing to do is to keep pushing back and defending your case until you have resolved the error with each credit bureau.
Most people in the United States don’t have to worry about credit reporting errors. But, there is a good amount of people that do have to worry. If you remember earlier, the report which was presented from the FTC states that one in five people have errors on their credit report. That means that 20% of the population is at risk.
In addition to just having credit reporting errors, you also have the risk of people stealing your identity and falsely opening accounts under your name as well.
With all of these variables, do yourself a favor and check your free annual credit report at least once a year. I think the peace of mind is worth it.