How to Check Your Credit Report and Dispute Errors

Ever checked your credit report and noticed something unusual? Perhaps a mortgage you didn’t take out, or a credit card bill you swear you’ve paid?

Credit report errors happen all the time. Fortunately, it’s easier to fix them than you might think.

Common Mistakes on Your Credit Report 

Credit reporting is an imperfect system. More than one-third of the respondents to a June 2021 survey of 6,000 consumers told Consumer Reports that they had found at least one error in their credit report.

credit report should, first of all, include the correct personal details. Second, the information about relevant financial institutions should be complete and accurate. Common errors, such as incorrect late-payment notices or short-term loans that aren’t yours, can drive down your credit score.

There are three credit reporting agencies, ExperianEquifax and TransUnion.

If you find a mistake on any of your three credit reports, it’s up to you to initiate the process to dispute it. Contact the credit bureau that generated the report that contains the mistake and be sure to note the disputed iteminaccuracies, or other incorrect information

Beware of These Common Credit Report Errors:

  • Incorrect personal information ranked the highest among consumers at about 29%, according to the survey. Mistakes included a wrong account number, incorrect or misspelled name or a wrong address, which took the lead at 56%.
  •  Accounts that belong to someone else or to someone who has the same or a similar name.
  • Signs of possible identity theft, where a fraudster uses another person’s details to apply for a credit card or runs expenses on someone else’s credit card
  • Closed accounts reported as open, which can expose you to identity theft and negatively impact your credit utilization ratio.
  • Duplicate accounts, or accounts that appear multiple times with different creditors listed. This can happen when a creditor sells a borrower‘s debt to a debt collection agency and both institutions list the debt in the credit report. 
  • Payments that have been incorrectly reported as late or delinquent.

How to Remove Late Payments from Your Credit Report 

We all make mistakes. Life happens, and maybe we forget to make a payment or run a little late on paying a bill because of extenuating circumstances. Even if you forgot or needed extra time, there are ways to seek forgiveness. Though asking for a late payment to be removed from your credit report might not work, it’s still worth making the request. A late payment can drop your score by up to 100 points and remain on your report for up to seven years. 

To start, try to directly appeal to the creditor (e.g. financial institution, credit union, lender or credit card issuer), explaining the situation and pointing out any unusual circumstances. 

This generally includes sending a goodwill letter to the creditor by using a template. These letters include an explanation of your situation — noting why you were late — and that you’re taking responsibility for the missed payment. Be sure to include specifics on why you missed the payment — such as losing a job — and point out any past success you’ve had with consistent on-time payments.

Another option is to try to negotiate with the creditor. Offer to pay the account in full (if you’re capable) in exchange for the creditor removing the late payment information. 

What is a Good Credit Score, Anyway?

Credit scores can range from 350 to 850, with 350 being the very worst and 850 being the very best. Your credit score will often determine whether you qualify for the best interest rates from lenders. Up to 90% use what’s commonly known as the FICO score, a credit score system that was created by the Fair Isaac Corporation.

Based on the FICO average:

  • 800-850 is great 
  • 740-799 is very good
  • 670-739 is good
  • 580-669 is fair 
  • 300-579 is poor  

Why Are Errors on Your Credit Reports Worth Fixing?

First of all, credit reports (and your credit score) play a key role in determining whether you qualify for a loan (home, car, etc.), rental house or apartment, or even a job. As well, if you’re planning to start (or if you run) a small business or startup and are looking to expand, most business lenders will base their decision on your personal credit.

And if you’re in need of a personal loan or short-term loan from your bank or credit union, any errors in your credit report may prevent you from qualifying. Looking for debt consolidation options? This will seriously limit your choices. Also, the information in your credit report will determine the interest rate you’ll pay. 

If you need to dispute an error on your credit report, follow the guidelines established by the Federal Trade Commission.

Free Ways to Monitor Your Credit Report for Errors 

You should never need to pay to check a credit report.

It’s a legal requirement for credit bureaus to supply borrowers with one free copy of a credit report every 12 months upon request. The only authorized site for free reports from the three major credit bureaus is annualcreditreport.com

The FTC has provided a form to request your credit reports by mail. Because of the COVID-19 pandemic, all three agencies are allowing consumers access to their reports weekly for free online until April 2022. 

Beware of any website that wants to charge you for access to your credit report. Also, note that the credit rating agency sites — and often your credit card companies as well — sell various products and monitoring services. You should not have to pay to access your reports (unless you want to access them more frequently than once a week). 

Be aware that these free credit reports do not include credit scores. You can get your credit score from several sources — many credit card companies will give it to you for free if you’re a customer. Or you can also buy it from one of the three credit reporting agencies. 

Free Reports for Fraud Victims

The law allows victims of fraud to receive free credit reports if:

  • Someone else has taken adverse action against them because of a credit report detail
  • They have suffered identity theft and placed a credit alert on their credit report
  • There’s inaccurate information in their file as a result of fraud

Watch out for scam sites that pose as free credit report sites that gather your personal information and increase your risk of potential fraud.

Other Free Reports

You’re also entitled to a free report if a company has taken action against you, such as denying your application for credit, insurance, or employment. According to guidelines set by the Federal Trade Commission, you must ask for your report within 60 days of receiving notice of the action. The notice will provide the name, address, and phone number of the credit reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days or if you’re on government assistance.

3 Things Everyone Should Know About Their Credit 

A credit report doesn’t include all the crucial aspects of a person’s credit. Here are three more things everyone needs to know about their credit:

1. Your Credit report, Credit score and What it Means

A “good” credit score is subjective and dependent on the company assessing the score. The majority of consumers have a score between 600 and 750. The average FICO score in 2020 was 711. Take note that there are two credit scores that agencies use — the FICO score and the VantageScore (the FICO is the most popular). 

2. How Your Credit Score is Calculated 

Five factors affect your credit score—payment history, credit utilization, credit history, account types, and recent activity. 

  • Payment history makes up 35% of your FICO score—such as on-time or missed payments. 
  • Credit usage (also known as credit utilization) makes up 30%—this is how much you owe relative to the credit limits you have. 
  • Your credit history accounts for 15% of your score—this is the average age of all your credit accounts (the older the better).
  • The mix of credit you have makes up 10% of your score — for example, revolving vs. installment. In general, a mix of the two is best. 
  • Recent activity makes up 10% and looks at the amount of new credit you’ve opened or inquiries (applications for new credit) you have. Too many new accounts or inquiries can hurt your score.

How to Boost Your Credit Score 

Besides removing errors, the easiest and quickest way to boost your score is to improve your credit utilization ratio (30% of your score). You want to keep the balances of your accounts relative to your total credit limits to 30% or lower. For example, if you have two credit cards and your available credit on both combined is $10,000, and you have a balance on one card of $5,000, your credit utilization rate is 50% — half of the total credit you have available is in use. But if you pay down the balance on your card to $2,500 without putting any money on the second card, your credit utilization rate drops to 25%, which would increase your credit score a bit.

Experian, TransUnion, Equifax: How Do You Contact Them to Fix Errors?

Equifax, Experian, and TransUnion are the three credit reporting agencies that track and monitor your credit. Depending on the lender or creditor, they will likely only use a credit report from one of these agencies. Keep in mind that these agencies do not communicate with each other, so information that’s correct on one report might not be correct on the other two. 

To correct errors, you can file an online dispute with each of the major credit bureaus by visiting their websites. Plan to include supporting documentation. Or you can call or write them, though for mail it’s best to arrange for a return receipt to ensure your request was received.

Here is the contact information:

  • Equifax: 1-866-349-5191, P.O. Box 740256, Atlanta, GA 30374
  • Experian: 1-888-397-3742, P.O. Box 4500, Allen, TX 75013
  • TransUnion: 1-800-916-8800, P.O. Box 2000, Chester, PA 19016

Why Monitor Your Credit Reports? 

Credit monitoring ensures that all the information in a credit file is accurate at all times. It helps you:

  • Spot identify theft
  • Identify inaccurate items on a credit report 
  • Determine whether you qualify for better rates on debt and have the chance to refinance existing loans 

How to Remove Errors From Your Credit Report 

When someone finds errors in their report, they should act immediately. You can use a 609 dispute letter to correct credit report errors.  

What Is a 609 Dispute Letter, and Does It Work?

A 609 dispute letter is a request from a borrower to a creditor to remove negative information (even if it’s accurate) from a credit report provided. The name refers to section 609 of the Fair Credit Reporting Act, even though, oddly, nothing on this topic is included in that particular section. It’s thanks to section 611 that everyone has the right to dispute information believed to be incorrect or unverifiable.

The letter is supposed to task creditors with producing information that’s hard to find. If they fail to provide the evidence, they must remove the disputed claim from the file. But if the creditor has evidence, the disputed information remains on file. 

Use this sample 609 dispute letter, which should include:

  • A mention of the issue(s) of dispute on the credit report and why they’re inaccurate
  • Identification information such as social security number, date of birth, and other personal information that might help in verification 
  • A copy of your credit report, highlighting problem areas 
  • Other supporting documents and their short description

What Should You Do If Your Credit Report Dispute Is Not Resolved? 

If you’re having trouble making progress with the appropriate agency, reach out to the authority that regulates the credit agencies — the Consumer Financial Protection Bureau. You can submit a claim with the CFPB about the issue you’ve encountered. 

Then, if that’s taking too long or doesn’t get results, consider hiring a consumer protection attorney. You can find an attorney via the National Association of Consumer Advocates website.

If the credit report issue is related to fraud or identity theft, seek free help from the Identity Theft Resource Center. If you suspect identity theft or fraud, immediately freeze your credit reports with all three agencies. This will prevent anyone from applying for new credit on your behalf.

A credit freeze restricts access to your credit report, which means you (or others) won’t be able to open any new credit accounts while the freeze is in place. If you must apply for new credit, you can temporarily lift the freeze. Otherwise, a freeze doesn’t expire and will remain in effect until you remove it.

Request a freeze (or removal of a freeze) by mail, online, or by phone. Keep in mind that by acting quickly to get these freezes in place, you significantly lessen your chance of becoming a victim. Be aware that the credit freeze is not immediate. It can take as little as an hour or up to one business day to take effect.