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How to Dispute Your Credit Report and Get Negative Items Removed

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If you think your credit rating doesn’t matter, just wait until you apply for a mortgage, a credit card, insurance or a new car loan. It definitely matters.

You might get approved depending on your credit score, your income, and other factors, but you could easily be stuck paying an incredibly high interest rate and more fees. It’s also possible you won’t get approved at all if your credit score is “poor” or even “fair.” And what then? Without good or decent credit, you could be stuck relying on a cosigner to finance a car or even get an apartment.

Sometimes incorrect and damaging marks are on your credit report are not your fault and can be a sign of identity theft or worse. Credit monitoring services can help guard against this, but how do you remove incorrect and potentially damaging items from your credit reports?

The three credit reporting agencies — Experian, Equifax, and TransUnion have processes for disputing information. When you take steps to have incorrect information removed from your reports, you give the credit bureaus the chance to update your score based on correct data.

If you think you may have errors on your credit reports, there are some steps you can take to time out for sure. Here’s exactly what you should do right away

How to Dispute Your Credit Reports in 5 Steps

Step 1: Get a Free Copy Of Your Credit Reports

Before you can take steps to get errors on your credit report fixed, it’s crucial to know and understand exactly what is wrong or incorrect. To find those details, you’ll need to get a copy of all three of your credit reports from Experian, Equifax, and TransUnion. Remember that each credit report may have different information reported to them, so checking just one of your reports isn’t enough.

Fortunately, it’s not overly difficult to check your full credit reports online, and you can even do it for free. The website AnnualCreditReport.com lets you check each of your credit reports every 12 months without a fee, and you can do it all from the comfort of your home.

Once you have access to each of your credit reports, take the time to look them over to check for errors. According to the Consumer Financial Protection Bureau (CFPB), the most common errors found on credit reports include:

  • Errors regarding identity data, such as your name or address
  • Accounts belonging to someone else with the same name as you
  • Accounts opened fraudulently in your name Late or delinquent accounts that are actually in good standing
  • Same debts listed more than once
  • Accounts with incorrect balance or payment information listed

Keep in mind that not all errors will have a damaging effect on your credit score. However, you should take the time to correct any incorrect information you find, even if it’s something as simple as an account reported opened when you closed it several years ago.

Step 2: Decide if you need a professional credit repair service

If you don’t have the time to get incorrect information removed from your credit report yourself, you may also want to consider professional credit repair. Companies who operate in this niche promise to do all the heavy lifting for you, including reaching out to credit bureaus and lenders who reported false information on your behalf.

If you do opt for professional credit repair, you should make sure the company you reach out to is reputable. The Federal Trade Commission (FTC) notes that the credit repair industry is rife with scams with many companies promising the world and failing to deliver. Also, these companies cannot take any steps you can’t take yourself. The only act on your behalf in exchange for a fee.

Lexington Law is a reputable credit repair company you should definitely check out if you decide to pay for help. Not only does Lexington Law have solid reviews, but they offer a free credit repair consultation that can help you figure out your next steps.

Step 3: Explain the Errors to the Credit Bureaus In Writing

Once you have looked over your credit reports and have a clear understanding of the errors that might be hurting your credit score, you should take the time to explain the errors to each credit bureau with incorrect information, in writing. The Federal Trade Commission (FTC) offers a sample dispute letter you can use and alter to suit your needs.

Keep in mind that, in addition to a letter explaining the error on your credit reports, you should also provide your name and your address, along with a lengthy explanation of the information and why it is incorrect. You should also include a copy of your credit reports affected, which you can print out or save from AnnualCreditReport.com. On the copies of your credit report you send, you should circle or highlight the incorrect information just to make it perfectly clear.

Here are the addresses you can use to dispute errors with each of the credit reporting agencies:

Experian
PO Box 4500 Allen, TX 75013
 
TransUnion LLC Consumer Dispute Center
PO Box 2000 Chester, PA 19016
 
Equifax
PO Box 740256 Atlanta, GA 30374-0256

The FTC suggests sending this information to the credit bureaus by certified mail. Credit reporting agencies will have 30 days to respond to your request “unless they consider it frivolous,” notes the FTC.

The credit bureaus are also required to forward the information you send to the organization that provided the information. If a credit card is reporting an incorrect balance, for example, they would forward the information you sent to the credit card company. Note that, when the credit bureau is done investigating your claim, they are also required to share your results with you in writing.

It’s also important to know that, if a mistake is ultimately fixed on your credit report, the credit bureau that fixed the mistake will send out updated credit reports to anyone who has requested one in the last six months. You do have to request this service from the credit bureaus, however.

Step 4: Inform the Company Who Made the Error

You should also send the same information to the company that made the reporting errors to the credit bureaus, whether that’s a credit card company or someone who oversees a loan you have. Once again, the FTC offers a sample dispute letter you can alter to suit your needs.

You should also send a copy of your credit reports with the incorrect information along in the same envelope. Make sure to send this information by certified mail as well so you can know for sure that the company received it.

Step 5: Consider credit monitoring

While this step won’t necessarily fix incorrect items on your credit report, it can help prevent future problems. Credit monitoring services keep an eye on your credit on your behalf, including watching out for signs of identity theft. Most companies in this niche monitor your credit reports for a low monthly fee, usually less than $20 or $25. While paying for this type of help may not seem ideal, this service can pay off in spades by helping you avoid the high cost and stress involved in identity theft and other types of fraud.

Some credit monitoring services are free, including Credit Karma and Credit Sesame. However, the free services don’t provide as much oversight as the paid credit monitoring services. Not only that, but Credit Karma and Credit Sesame don’t provide access to your credit reports from all three credit bureaus — Experian, Equifax, and TransUnion.

If you want more robust coverage, you’ll need to pay for professional help. We suggest Identity Guard, which provides services like dark web monitoring, bank account monitoring, credit score monitoring and more for as little as $21.00 per month.

Fixing Credit Report Errors is Crucial

While the steps we’ve outlined above might seem like a lot, it’s important to remember what’s really at stake here. If you don’t take care of your credit, you may not be able to qualify for a loan if you hope to own your own home or finance a car one day. Even if you are approved for a loan with poor or fair credit, you will likely pay much higher interest rates, which means more money out of your pocket for no reason at all.

Like it or not, but your credit score is an important component that affects your financial health. Where good credit can help you save money and heartache over time, poor credit makes your life harder than it needs to be.

Take the time to keep your credit in good shape, but also remember that it’s up to you to make sure incorrect information on your credit reports doesn’t wreck your score. All you’ll need to do is send a few letters and follow up for the results, and the effort will be well worth it.

What is “Good” Credit Anyway?

You may be wondering about the credit score you should shoot for, and whether your credit is really that bad, to begin with. That’s a good question, and it does help to have a general idea of the credit score you hope to have in the future.

While there are several types of credit scores, the FICO score is the most popular since it’s used by more than 90% of lenders nationwide. With this type of credit scoring method, scores range from 300 to 850, with scores on the higher end being “the best.”

Here’s how myFICO.com breaks down the credit score ranges:

  • Exceptional: 800+
  • Very Good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 579 and below

To qualify for the best rates and loan terms and avoid most of the downsides that can hurt people with imperfect credit, you should strive to maintain a FICO score of 740 or above. Disputing incorrect information on your credit reports may not help you get there if that’s all you do, but it can certainly help.

The post How to Dispute Your Credit Report and Get Negative Items Removed appeared first on Good Financial Cents®.

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