Experts estimate that 25% of all credit reports contains a blatant error. In other words 1 in every 4 people have a mistake on their credit history. This mistake could be costing you real money and higher interest rates, down payments, and potentially rejection for financing.
Congress passed laws that gives every US citizen the right to dispute any item on their credit report. You can dispute an item if you feel it is inaccurate or incorrect.
A negative item on your credit report can be inaccurate because: the dates are wrong, the balance is incorrect, the debt is older than 7 years, it is not your account, the account is paid, it is not a valid debt… In other words an item can be incorrect on your credit report for all sorts of reasons not just that it is not your account.
The law that entitles you to do this is called the Fair Credit Reporting Act. This law also requires the credit bureaus to investigate your dispute and it says if the bureaus are unable to verify the account with the lender or collection agency then it must be removed from your credit report.
It is estimated that up to 70% of all bureau investigations result in the lender not verifying the debt. This means that the item gets removed from your credit report and you’re one step closer to having a clean credit history.
As a result of our recent economic recession banks and lending institutions have completely revamped their approval requirements. To be approved for financing at competitive interest rates you must have a 700 credit score or higher. The average credit score in America is a 611, in other words rejection for financing or outrageous interest rates.
What Are The Steps Involved In Filing A Dispute?
1. Get Your Credit Report From Each Bureau – commonly the information on your report is going to vary between all 3 credit bureaus. An easy way to get blacklisted by the bureaus is to file a dispute for an item that is not reported with that bureau report.
2. Create Your Dispute Letters – in this letter you need to include your personal information, the item you are disputing, the reason you’re disputing it, and any supporting documentation you may have. This letter needs to be mailed to each credit bureau, 3 letters in all. You should mail this letter through certified mail so you have documentation that you filed your dispute.
3. Get Organized – unfortunately when the credit bureaus investigate your dispute they are only going to be spending money. There are no profits to generate from correcting information the credit bureaus collect about you and they are therefore very reluctant to investigate consumer disputes.
They do so only because they are required to by law and have a poor history of following that evidence by the many FTC fines that the credit bureaus have paid over the years. You will typically get a letter from them requesting more information.
This is nothing more than a stall tactic however you should comply and send in any additional information that they may be requesting. Additionally you need to make a note of this and where your dispute is in the process with each of the 3 credit bureaus.
4. Investigation – if you remain persistent and organized eventually the credit bureaus will investigate your credit report dispute. They’re going to contact the lender and ask them to verify the debt, the balance due, and the dates reported. If this information is not verified then the account must be removed from your credit report.
5. Check Your Mailbox – the credit bureaus are going to notify you of the results of their investigation, if the item was removed or verified. Celebrate your victories and just because you have an item verified on your credit report it still does not mean it has to stay there. There are other options to remove negative information from your credit report and without just waiting 7 long years. Don’t just live with bad credit, take actions they and use your rights to ensure that only information that is correct is reported on your credit history.
Pull your free credit reports from all three credit bureaus once a year from https://www.annualcreditreport.com: Experian, Equifax & Transunion
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