Here's how to correct a mistake on your credit report
A small credit report error could cause big problems in your life.
These mistakes aren't rare, either. More than a third of consumers who recently checked their credit reports found mistakes, according to a new Consumer Reports investigation among 6,000 consumers. Credit report mistakes make up the most common complaints to the Consumer Financial Protection Bureau and have more than doubled since 2019.
"You can spend many years building great credit and see your score tank after a single blemish," said Ted Rossman, senior industry analyst at CreditCards.com. "This could lead you to be declined for loans and lines of credit, and even if you’re approved, a lower credit score would probably mean a higher interest rate."
An error can also cause problems if you're renting an apartment, getting a new cell phone, hooking up utilities, or even interviewing for a job.
"Just one late payment could trim 100 points off an excellent credit score, so if there’s an error like that on your credit report, it would be a big deal," Rossman said.
Here's how to correct a mistake like that.
What errors to look for
First, pull your credit reports from Equifax, Experian, and TransUnion at AnnualCreditReport.com. Review the report for these common mistakes:
Accounts or loans that have been paid off but don't appear so
Accounts or loans with the wrong balances
Loans listed multiple times
Debts that are erroneously reported in collections
Negative information (besides bankruptcy) that is older than 7 years old and should fall off your report
Closed credit accounts that appear open or erroneously closed by the lender when you requested it
Personal information mistakes, such as misspelled names, wrong addresses, or incorrect birth dates
Two more serious mistakes include accounts that belong to someone else and accounts opened under your name without your permission.
The first instance can occur when you have a common first and last name with someone or you share the same name with a family member. Their accounts can accidentally end up appearing on your report. Other times, a typo with a Social Security number can cause someone else's account to be on your report.
The second instance likely indicates identity theft. That means someone with your personal credentials — such as name, address, birth date, and Social Security number — was able to open a new credit under your name. This requires more legwork to resolve, which we outline here.
How to fix credit report errors
If you find an error, especially one that could hurt your credit score, contact both the credit reporting agency and the lender that provided the incorrect information to the bureau.
Under the Fair Credit Reporting Act, both the bureau and lender must correct inaccurate or incomplete information on your report.
Start with the credit bureau
You can file a dispute online with each of the three bureaus: Experian, Equifax, and TransUnion. Experian now only accepts online disputes.
In your dispute, state what information you think is incorrect. The agencies must investigate the dispute within 30 days, unless they deem it frivolous. Provide copies of documents supporting your dispute and explain why you think there is an error. Request a deletion or correction of the information. You may also want to provide a copy of your report with the disputed items highlighted or circled.
If you mail a letter, send it by certified mail with a return receipt requested, so you have proof that the credit bureau received your dispute. Keep copies of your dispute letter and supporting documents.
Contact the lender
Also, contact the lender or debt collector who provided the information to the credit bureau. In your letter, explain what information you are disputing and include copies of supporting documents. Many lenders have a specific address for disputes.
If the lender reports the disputed information to a bureau again, the lender must include a notice of your dispute. Request a copy of any correspondence the lender sends to the credit agency.
How long to resolve
This process could take between 30 and 90 days. Once a dispute has been resolved, you should receive a free credit report from the bureau under many state laws to verify the new information.
Going forward
To stay on top of any mistakes, regularly review your credit reports from all three agencies. Typically, you can get your Equifax, Experian, and TransUnion credit reports for free once every 12 months at AnnualCreditReport.com. Now, because of the pandemic, you can now pull each of these weekly at no cost until April 20, 2022.
"You probably don’t need to check that often, but every quarter or so is a good idea," Rossman said. "Report any errors promptly."
Janna is an editor for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @JannaHerron.
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