According to a Consumer Report study, more than one-third of study participants found errors on their credit reports. Credit can affect more than just your chances for loan approval. Credit can also be used by employers extending job offers, for rental applications, when calculating insurance rates, and even when starting accounts with utility companies. Mistakes or inaccurate information on your credit report could hinder your approval process in each of these areas or result in higher costs. The sooner you know if there are mistakes on your report, the sooner you will be able to begin the dispute process.
What the mistakes look like
The most commonly reported errors on a credit report are related to personal information or debts. Incorrect personal information can be a red flag of identity theft and mistakes on the reporting of your debts can have a large impact on your credit score. One late payment being reported could drop your score by 100 points. Review your report for these common errors:
- Unrecognized accounts
- Unrecognized debt reported to collections
- Payments wrongly reporting as being late
- Payments missing completely
- Wrong address
- Misspelled name
- Wrong name
If you find information on your credit report that is inaccurate, you have the right to dispute and have these mistakes corrected. You will need to work with the credit bureaus and the business reporting the information to fix these errors. The Federal Trade Commission as well as AnnualCreditReport.com have lists of addresses along with forms and sample letters that can be sent to Experian, TransUnion, and Equifax. It is crucial to keep copies of the documents you send for your records and the FTC recommends sending your letters through certified mail to insure a return receipt for your records. Along with your letter, you will also want to send any other documents that provide evidence to resolve the mistake.
The credit bureaus have 30 days to investigate your claim and provide you with a response. If they accept your claim, follow up by reviewing your credit report to make sure the mistake is corrected. If they deny your claim, you are always able to file again, but be sure to include additional information or evidence to support your claim. In severe situations, such as identity theft, the National Association of Consumer Advocates has a list of attorneys to fight for your rights.