How to deal with errors on your credit report

Your credit score is one of the most important numbers in your life, impacting everything from whether you qualify for loans, credit cards and even apartments, to the interest rates you’ll pay on any money you borrow and ultimately, how much money you save up over time. That said, it’s important to keep an eye on your score — not only so you know where you stand before applying for something like a mortgage, but also because it’s possible for parts of it to be inaccurate. In 2013, the Federal Trade Commission (FTC) reported that a study revealed five percent of consumers found errors on one of their credit reports that negatively impacted their loan and insurance rates.

Shannah Compton Game, a certified financial planner and host of the podcast Millennial Money, said “it’s fairly common” for there to be errors on your credit report, due to situations like fraud (such as someone stealing your credit card or using your social security number to open a credit account) or inaccuracies reported by your loan issuer (such as payments wrongly being listed as late, balances being off or authorized users being inaccurately included on your account) — but you’ll only know those errors exist if you check your report. “You just want to make sure that your credit report is clean, all the items belong to you and that someone is not misusing your credit without you knowing,” Game said.

You are entitled to one free credit report per year from each of the three credit bureaus (TransUnion, Equifax and Experian), which you can get through AnnualCreditReport.com; and, according to NerdWallet, you can get an additional free report if an application is rejected because of your credit score or if you place a fraud alert on an account. Once you have your report in front of you, here’s what to look for and how to dispute any errors you might find.

Review your full credit report

“A lot of people just want to know, ‘What is my score?’” Game said. “Your score is great — it’s super important — but you also want to see the behind-the-scenes details. [For example], is there something misrepresented from a credit card company or a loan company? It’s important to just make sure all of that matches up with what you know to be true.”

Start by reviewing the negative items on your report, which Game said appear in the first section and include things like late payments and loans that went to collections. If there are any negative items, “make sure that those items do belong to you,” she said.

From there, look at the section that shows items in good standing — such as current credit cards and loans, as well as closed accounts that you’ve paid off. And don’t breeze through this section just because it’s positive: It’s possible for there to be fraudulent accounts opened in your name that aren’t delinquent but need to be cut off, or for you to still be listed as an authorized user on an ex-spouse or partner’s account (or vice versa) after you’ve separated. “You want to make sure that you’re removed...because if that person decided to become delinquent with payment or to abuse that credit, that also impacts your score,” Game said.

File disputes with the credit bureau and credit issuer

If the error you identify originated with the credit issuer (such as inaccuracies in reporting payments), you can start by filing a dispute with them. (The FTC provides a sample letter on its website.) It’s possible the company will correct the error or work with you to resolve delinquencies and alert the credit bureau of your dispute or any necessary changes — the latter of which is a requirement, per the FTC. “If you don’t get very far with them, then you can go through the credit bureau,” Game said. That said, you can start with the credit bureau, and they’ll contact the issuer as part of their investigation. If the error is identity-theft related, go straight to the credit bureau.

Each of the three bureaus offers the ability to dispute errors online, but you can also submit a letter via snail mail — which some experts recommend, as it allows you to provide as much evidence as you’d like and get physical proof (through certified mail receipts) that your dispute was received.

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Provide as much evidence as possible

Either way, it’s important to provide as much evidence as possible supporting your case — whether that’s account statements; payment receipts; or birth, death or divorce certificates. “What you’re looking to provide...is the reason that this error or this credit does not belong to you, so either that the balance is incorrect or you believe somebody has stolen your identity because of X, Y and Z,” Game said. “Any...backup evidence you can provide is just going to make your case stronger to the credit bureau or to the credit card you’re contacting.” And according to CreditKarma, if you don’t submit sufficient or accurate information, the bureau can classify your dispute as “frivolous,” in which case it doesn’t have to investigate.

The FTC recommends sending copies of these documents and keeping the originals, and to also enclose a copy of your credit report with the errors in question circled.

Wait for a response and ensure updates are made

“It normally takes the credit bureau up to 30 to 45 days to...investigate that dispute before they will come back to you and say whether they need more information or whether it’s been taken care of,” Game said. Once they’ve investigated, they’re required to notify you of the results in writing and provide a free copy of your updated report if any changes were made. According to the FTC, you can also ask the bureau to send notices of corrections to anyone who received your inaccurate report in the past six months, or to send revised copies to anyone who received one in the past two years for employment reasons.

If your request is denied, you can still ask for a statement describing your dispute to be added to your file and future reports, and (potentially for a fee) for that statement to be sent to anyone who recently received a copy of your report. If you believe the denial is wrong, you can attempt the dispute again; though Game recommended waiting 30 days and only doing so if you have additional documentation. “If you’re just submitting the same thing over again, the chances are that’s going to remain as-is with the credit bureau,” she said.

And, as LifeLock reported, if you still aren’t getting anywhere and believe your dispute is valid, you can file a complaint with the Consumer Financial Protection Bureau.

Ultimately, while it may be a bit tedious, an error on your credit report can do serious damage to your finances — so, as Game said, “it’s worth it to take a little bit of time to prove that [it] is an error [and] get that removed from your credit report.”