Examples of Credit Report Errors

Some credit report errors are harmless. For example, a misspelled name or out-of-date address are errors that won’t hurt your credit. Neither of these impacts your credit score, so trying to clear these errors from your credit report might be more trouble than it’s worth.

Other credit report errors can be worse. This includes things like:

• Credit limits being reported lower than they really are. Since part of your score is based on the ratio of your credit card balance to your credit limit, incorrectly reported credit limits can lower your credit score.
• Credit card payments reported late that were really on time. Late credit card payments are most damaging to your credit score.
• Credit card accounts that don’t belong to you. If the account has negative information like late payments or a high credit card balance, this is especially damaging.
• Debt collection accounts that don’t belong to you or that weren’t actually sent to a collection agency.
• Accounts continuing to be reported delinquent that were included in a bankruptcy.
• Any account reported unpaid that was actually paid.

How to Spot Credit Report Errors

You should check your credit report regularly. Otherwise, credit report errors will catch up with you at the most inconvenient time, like when you’re trying to get approved for a home or car loan. Your application process will have to wait until you’ve cleared the errors from your credit report.

You should be proactive about detecting credit report errors. Review your credit report periodically throughout the year, especially before you apply for a major loan.

You can check your credit report free for free by visiting AnnualCreditReport.com or by signing up for a promotional offer. Otherwise, you’ll have to purchase your credit report through the credit bureaus.

You should check all three of your credit reports from the major credit bureaus – Equifax, Experian, and TransUnion. That’s because your credit reports aren’t exactly alike. There may be accounts on one credit report that aren’t on the others.

Once you receive your credit report, review each detail about each account to spot errors. Use a highlighter or colored pen to highlight questionable items on your report.

Correcting Errors On Your Credit Report

A Federal law, the Fair Credit Reporting Act (FCRA), gives you the right to an accurate credit report. If you find errors on your credit report, you can use the credit report dispute process to remove inaccurate information from your credit report.

If you ordered your credit report online, you’ll be given the option to dispute credit report errors online. Each account on your credit report will have a button next to it giving you the option to dispute that account. Then, you’ll be given a few options as reasons for the dispute. For example, the account isn’t yours, the account was paid on time, etc.

You can also make a credit report dispute in writing. When you find a credit report error, write a letter to the credit bureaus indicating the error on your credit report and why it is an error. If you have proof of the error, like a cancelled check or copy of your bankruptcy discharge, you can include a copy of it to help your dispute. When you send your dispute letter and supporting documentation, include a copy of your credit report with the errors highlighted.

Send your credit report dispute letter is via certified mail with return receipt requested. This gives you proof that you sent the dispute and that the credit bureau actually received it.

Sample Credit Report Dispute Letter

Here is a sample credit report dispute letter you can modify and send to the credit bureau.

Date

Your Name
Your Address, City, State Zip Code

Credit Bureau
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute information in my credit report. I have attached a copy of the credit report with the disputed items highlighted.

This account is inaccurate because {give the reason the information is accurate}. I’m requesting the account be removed from my credit report as soon as possible.

Sincerely,

Your Name

Make sure you update the letter before sending it to the credit bureau so that it reflects the information you’re disputing and the result you want from the dispute. For example, if your credit limit is not reported correctly, you may simply want the account updated rather than deleted.

What Happens After the Dispute

Once you submit your credit report dispute, the credit bureau has 30 days to investigate your dispute and provide you with the results. If the credit bureau determines that you’re right and the credit report does contain an error, the error will be removed and you’ll be given a copy of your updated credit report.

On the other hand, if the credit bureau’s investigation doesn’t return in your favor, you’ll be given a reason why. You also have the opportunity to add a 100-word personal statement to your credit report explaining why the information is being disputed.

Related posts:

1. What to Do About Credit Card Billing Errors
2. How to Handle a Lost or Stolen Credit Card
3. 5 Reasons to Check Your Credit Report