how to dispute credit report

How to Dispute Your Credit Report

How to Dispute Your Credit Report

Learning how to dispute your credit report can be a confusing and complicated thing to do. The following are some practical steps for you to take to navigate your way through a financial check-up.

Why Should You Check Your Credit Report

It’s quite common for errors to appear in your credit report, which is why it’s also common to dispute your credit report. These errors may not be insignificant. They may be important ones that can have a powerful impact on your future. The fact of the matter is that you could be missing out on a lot when you’re not looking at your credit report. Check out some important statistics and facts below:

  • 35% of Americans have never checked their credit report
  • A 2012 Federal Trade Commission (FTC) report found one in four Americans found at least one potentially important error in at least one of their credit reports
  • Errors on your credit report may affect if you can take out a loan
  • They may affect how much you will have to pay money to get that loan
  • Ensure the information on your credit report is correct, complete, and updated before applying for a loan for a large purchase e.g. home mortgage, car loan, buy insurance, or applying for a job
  • To prevent identity theft

Now is the time to act. Plan now for your future, especially if you’re thinking about doing any of the following things above. You never know what’s going to happen. And you may not know what you’re going to want.

How To Spot An Error

An error is information on your credit report that shouldn’t be there. This might be due to the fact that the information is not yours, is wrongly reported, or it’s against the law to be listed. Common credit report errors include errors in personal information, accounts, and/or derogatory marks.

Personal Information Errors

  • Wrong name listed
  • Addresses you’ve never lived at or used as a mailing address
  • Inaccurate employer information

Account-Related Errors

  • A late payment that’s more than seven years old
  • Having a credit card or loan account listed that’s not yours (or that you’re not a co-signer or an authorized user on)
  • An account that was closed by you, but shows as being closed by the provider

Derogatory Mark Errors

  • A paid-off collections account that still shows as being unpaid
  • A paid tax liens that is more than seven years past the date of payment
  • An account that was discharged in bankruptcy is still showing up as active with a balance (account history can still be reported)

How to Obtain Your Free Credit Report

The Fair Credit Reporting Act (FCRA) requires the three nationwide companies to provide you a free credit report. Equifax, TransUnion, and Experian must, upon request from you, give you a free report once every 12 months. They must provide a website, telephone number (toll-free), and mailing address. You can use any of these 3 methods to obtain your free credit report.

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

You don’t need to request your free credit report from the three nationwide credit reporting companies separately. In fact, you ask to get the credit report from the 3 credit reporting companies simultaneously.

Other Reasons for Getting a Free Credit Report

There are other situations where you’re entitled to a free report. You can get a free credit report if a company takes negative action against you by denying your application for insurance, employment, or for credit.

You can also get a free credit report for the following other reasons:

  • You’re unemployed and are planning to look for a job within the next 60 days
  • You’re on welfare
  • Your credit report is inaccurate due to fraud (e.g. identity theft)

Buying Your Credit Report

If you need a credit report for not any of the reasons above, it might cost you to buy another copy of your report within 12-month period. Contact the three credit reporting companies to a purchase your credit report:

Fixing Credit Report Errors

You want to get into touch with both the credit bureau and the organization that gave the information to the bureau. Under the FCRA, both of these parties are responsible for ensuring that there isn’t wrong or missing information in your credit report.

Credit Bureau

Unless the credit bureau thinks your dispute is frivolous, they must look into the item(s) in question typically within 30 days. Include copies of the documents that will help your case. The letter should include the following:

  • Your full name
  • Your up-to-date address
  • Clearly show each item you are disputing in the credit report
  • List all of the facts along with an explanation for why it supports your dispute
  • Request a deletion or correction
  • Include a copy of your report
  • Circle items you’re disputing
  • Use a sample letter such as this one

You should keep copies of your disputed letter and enclosures. Use certified mail to send your letter, along with a return receipt requested. This way you can keep a record that the credit bureau received your correspondence.

Appropriate creditor or information provider

You also want to write to the appropriate creditor or information provider. Explain that you are disputing the information provided to the bureau.

  • Include copies of documents that support your position
  • Request that the provider copy you on correspondence they send to the bureau

This process may take between 30 and 90 days. Remember that if the provider again reports the same information to a bureau, it must include a notice of your dispute.

Conclusion

Sometimes, disputing incorrect information on your credit report may be one of the fastest ways in making a positive impact on your credit score. At the end of the day, it’s really important to dispute wrong information on your credit report because it may have a huge effect on your financial future. Therefore, learning how to dispute your credit report is important to know.

bad information on credit report

How Long Bad Information Stays On Your Credit Report

How Long Bad Information Stays On Your Credit Report

Many of us have wondered this before, particularly after we make a mistake or slip in remembering to pay the bills on time. But before we go into the details of how long bad information stays on your credit report, you should be aware of where that “bad information” in your credit report comes from.

This “bad information” is gained from multiple sources. Examples include collection agencies, lenders who have issued your credit, or whatever is included in your public information. All of this information is then reported to the three nationwide credit reporting agencies. These credit reporting agencies put all of this information together and lists it in your credit report. So, credit reporting companies don’t make judgments about the information; they simply reveal what’s being sent to them.

Luckily for you, the Fair Credit Reporting Act (FCRA) limits how long a credit reporting agency can reveal negative items in your report. The following is a breakdown of what kind of bad information is included in your credit report and how long bad information stays on your credit report.

Public Records

There are 3 types of public records that show up on a credit report: bankruptcies, tax liens, and civil judgments. A tax lien usually results from not paying your taxes. A civil judgment is a debt you owe through the courts because of a lawsuit. Judgments generally stay on your credit file for 7 years. This is 7 years from the date filed, whether paid or not. Paid tax liens generally stay on your credit file for 7 years from the date paid. Unpaid tax liens, however, remain on your credit file indefinitely.

Bankruptcies

A bankruptcy is a legal proceeding in which an individual is given relief from paying debts they’re unable to repay. The 2 important forms of bankruptcy are called chapters because they are defined by chapters in bankruptcy law. For Chapter 13 bankruptcy, a person repays at least a partial amount of their debts. Under Chapter 7, a person doesn’t pay any of the debts.

Completed Chapter 13 bankruptcies remain on your credit report for 7 years, and 10 years for Chapter 7 and 11 bankruptcies. If your Chapter 13 bankruptcy was dismissed, it remains on your credit file for 10 years from the date filed. The 10 years starts from the date of the dismissal. Contrary to a completed case, a dismissed case means you didn’t get an order discharging your debts.

Criminal Records

Most criminal records like information on arrests and indictments can be reported until the expiration of the statute of limitations or before seven years, whichever is longer. But criminal convictions may be reported for an indefinite period. An indictment only establishes whether or not there is enough information to charge a suspect with crime. A conviction has to do with an individual who’s been tried and convicted by a judge or jury.

Credit Accounts

Also called trade lines, lenders report on each account you’ve created with them. One of the important things reported is the type of account (whether it’s a bankcard, auto loan, mortgage, etc.). Other reported information include the date you opened the account, your credit or loan amount, account balance, and your payment history.

Late payments remain on your credit report for about 7 years. Accounts with current statuses such as R1 and I1 that show previously late payment history will remain on the credit file for up to 10 years from the date of last activity. R1 means revolving debt on credit cards and home equity lines where the account holder has never missed a payment. I1 is installment debt such as auto or student loan. Only the late payment history is taken out after 7 years.

Collections

Collections refer to the transfer of late or past-due accounts to a collection agency. Amounts are then fully or partially recovered. Collection accounts stay on your credit file for 7 years. The start date begins from when the account first became past due prior to the account being placed in a collection agency.

Foreclosures

A foreclosure basically means that you lost your house due to not paying your mortgage. It’s actually seen by lenders as being something very negative, second only to bankruptcy. A foreclosure on your credit report will remain there for 7 years.

Inquiries

Inquiries occur when you apply for a loan. You’re essentially authorizing your lender to ask a copy of your credit report. These inquiries list everyone who’s accessed your credit report within the last 2 years. The reports includes voluntary inquiries which are  inquiries due to you asking for credit. And it also includes involuntary requests which happen when a lender orders your report for the purposes of pre-approved credit offers in the mail. Involuntary requests do not affect your credit score but will remain on your credit file for 12 months.

Bullet Point Summary Of How Long Bad Information Stays On Your Credit Report

  • Public records like paid tax liens and civil judgment will remain for 7 years. Unpaid tax liens may remain indefinitely.
  • 7 years for completed Chapter 13 bankruptcy. 10 years for dismissed chapter 13 bankruptcy. 10 years for Chapter 7 and 11 bankruptcies.
  • For arrests and indictments, 7 years or if the statute of limitations has expired, whichever is longer. Criminal convictions may be reported indefinitely.
  • Late payment on credit accounts remain for 7 years.
  • Collections stay on for 7 years.
  • Foreclosures stay on for 7 years.
  • Voluntary inquiries stay on for 2 years.

At the end of the day, you should know that the three nationwide credit reporting agencies receive both negative AND positive information. A credit report is obviously not all about negative things in your credit. Items that are also positive or neutral are not only included but may be there indefinitely. Another thing to realize is that the older the negative items, they less of an effect they’ll have on your FICO® score. Further, the type of information channel affects how long bad information stays on your credit report.

Many of us have made financial mistakes in one way or another. Understanding what mistakes you’ve made in the past and how much of an impact it has on your credit will give you a better perspective in rebuilding your credit. If you haven’t checked your credit report recently, why not have a look? Make sure that all your information is correct and accurately shows your personal financial history.

Check out our list of where to get your credit report and credit score for free, to see what’s on your record. If you’d like more information about the credit repair companies that are most effective, you can view our list of the best reputable companies for credit repair.