When you file a dispute for inaccurate tradelines on a credit report, for removal, it is affectionately known as “credit repair”, and although I’m no expert, I still feel more qualified to do it than most credit repair companies, who tend to be underhanded in their approach and charge a pretty penny.
DIY credit repair? Yes, and it’s better than the alternative. Doing it yourself is relatively easy, 100% free, your financial information is kept between you and the credit bureaus, and you have total control over your approach, although not necessarily the outcome.
I have previously written about how I haven’t used a credit card in many years, and feel that credit is not essential to life. I still strongly believe that, but in the face of a possible home purchase in the somewhat near future, I can see that it’s in my best interest to repair and “bulk up” my credit now. This doesn’t mean I’m going to run hog wild with credit cards. Instead, I recently funded a $500 prepaid card through Discover, and I’m using it wisely at a 10-15% debt-to-income ratio while paying it off each month. My main focus today, however, is to dispute inaccurate and out-dated information on my credit report, which will, in turn, raise my credit score with little to no effort on my part.
The Fair Credit Reporting Act is what gives the right to privacy and accuracy from the credit bureaus in charge of reporting your credit information (Equifax, TransUnion, Experian). The FCRA also allows you the opportunity to file a dispute against entries on your credit report that are erroneous or out-of-date.
Why Should I File a Dispute?
There’s nobody saying you need to dispute anything, however, you should know that certain types of inaccuracies can have a seriously negative impact on your credit score. These can vary greatly, so it’s in your best interest to monitor your credit report to be sure it’s up-to-date and accurate.
The information reported on your credit report is used to create your credit score, which is used to assess whether you are credit worthy. This is a huge deciding factor in whether you qualify for any credit at all (including a home mortgage), but it also plays a huge role in how much interest you pay on your loans and credit cards. If these things are important to you, then your credit should be a top priority.
What is a dispute?
A dispute is, essentially, a disagreement. When it comes to credit reports, you will generally be disputing an item that falls into one of the following categories (most common):
Incomplete or inaccurate Information – Examples:
- an account that’s been paid but is still reporting a balance
- personally identifiable information being reported incorrectly
- accounts closed by you but show as closed by “grantor”
Possible Mistaken Identity – Examples:
- any account listed that doesn’t belong to you
- unfamiliar “hard pull” inquiries when you haven’t applied for credit
- previous addresses or phone numbers listed that have never been yours
Out-of-date Information – Examples:
- paid tax liens reporting as unpaid. An unpaid tax lien will remain on you report for 10 years, but a paid one will only stay for 7 years from the date paid.
- a negative account reporting past the statute of limitations, which is 7.5 years from when payments stopped. Positive accounts can potentially remain on your credit report forever.
- any account that is still being reported after it was discharged through a bankruptcy. The bankruptcy itself will remain on your credit report for 10 years.
*** DO NOT TRY TO FILE A DISPUTE AGAINST LEGITIMATE DEBTS THAT YOU KNOW YOU OWE. ***
Getting Your Credit Reports
The first step to dispute is pulling your most current credit reports. You can pull all three for free using annualcreditreport.com, but only once every 12 months. Unfortunately, I found the website to be less than user-friendly. I tried to get all three of mine, but only ended up being able to view my TransUnion report. I had to pay for the other two through their company websites (equifax.com and experian.com). You may have more patience than me (I could have written in to get my free ones from the two I could not access immediately online).
Once you have your credit reports, print them out. You may notice an inconsistency between them, but this is mostly due to the imperfections of the system itself. Some lenders report to one bureau and not the others, or maybe you had one account while you were married, then opened a new one after your divorce. Not to mention the timing of the updates can all vary and show up at different times on your report. The system is the system… for now.
Focus on one report at a time and study it. You need to become familiar with your credit reports and know what’s on them, who you owe and who you don’t. This may sound pretty basic, but for people with debt, this may prove to be a challenge. If you have unpaid balances, chances are those debts have been sold off to a debt buyer or debt collection attorney, and will not show up under the original creditor’s name, making it difficult to identify. Or, it may be missing from your credit report altogether, if those buyers got their hands on your account recently and haven’t done anything with it yet.
How can you find your debt? Usually, you can call your original creditor directly, and they can tell you who they sold it to, but if it’s been a few years, it could have been sold more than once and, in that case, you’ll have to follow the breadcrumbs to find it. Michael Bovee talks more about this here:
Where to Look in Your Credit Report
The next step is to identify which entries are valid and which are not. Most potential disputes are going to be found under the “Negative Accounts” area within the credit report, so start there. In my case, though, significant errors were found under public records, so be sure you cover the entire report from each credit bureau.
A special note on personal information. Please make sure your name, addresses, phone numbers, and employment are all correct. This is just as important as the accounts themselves, because if you’re listed at a previous address or have a phone number reporting that’s never been yours, it may signify a possible mix-up in identity, which is vital to correct immediately. I found an out-of-state phone number on mine I will also be disputing.
Note: When you file disputes, do so all at once, as another one cannot be filed until your first dispute request is complete, which can take up to 30 days.
The Best Way to File a Dispute will Vary
Submitting your dispute is relatively easy, in most cases. The majority of people will submit theirs online through each credit bureau’s website, like I did. You’ll have the option to upload any supporting documentation and you can check the status of your dispute during the 30-day investigation.
You can also call or write the credit bureaus. Most credit experts will recommend writing the bureaus directly, so you can tell your side of the story and provide documented evidence, especially if you have a unique issue or complicated case to plead. This option also leaves a “paper trail”, in case things don’t go your way and you decide to sue for damages at a later time.
Note: You can’t sue for credit damage unless you dispute it first. And, don’t send in any original documentation that you aren’t willing to part with permanently.
I filed my disputes online because it was quick and easy. If you also prefer to file a dispute online, make sure and read the fine print, as you may be agreeing to arbitration down the road – in lieu of a trial – if you ever did want to pursue an action against a credit bureau (such as an FCRA violation).
Online Dispute – https://www.experian.com/disputes/main.html
Mail – https://www.experian.com/disputes/experian-mailing-address.html
Call TransUnion – 1-800-916-8800
Online Dispute – https://www.transunion.com/credit-disputes/dispute-your-credit
Mail – https://www.transunion.com/resources/docs/rev/personal/InvestigationRequest.pdf
Online Dispute – https://www.equifax.com/personal/credit-report-services/credit-dispute/
Mail – https://www.equifax.com/cp/MailInDislcosureRequest.pdf
If disputing items on your credit report that are legitimately wrong or out-dated, and the documentation to support it is provided, there shouldn’t be a problem getting the bureaus to update it accordingly.
If the credit bureaus don’t see your side of things and the result is negative, then it may be advisable to contact the furnisher of the information. If you decide to make a second go of it, I would strongly encourage you to do so in writing and include all the details, reasoning, and evidence to support your case. If this also fails, you do have the option of filing a complaint with the Consumer Financial Protection Bureau (CFPB).
In any online dispute, providing supporting documentation obviously helps the bureaus to make quick work of a file and get it resolved quickly. In doing this, Equifax had my changes updated and resolved in two days! It was pretty straightforward, and I provided everything they needed to make the correction, so things moved along quickly without issue.
I don’t imagine the rest will come through as quickly, as I have two more disputes pending with TransUnion, but surprisingly, none with Experian (<—most accurate for me). I will be checking the status of these disputes in the coming weeks, and update you with the final results.
Now I wait impatiently.
UPDATE 6/27/16: TransUnion completed my two disputes; a tax lien showing as unpaid even though it had been paid, and another tax lien I did not recognize and could not find in the secretary of state database, so I disputed it as an error. The former was updated to show as “released” and “paid”, and the latter was proven to be mine, but as “released” and “paid”. TransUnion provided me with an updated credit report to review these changes, which was nice. I didn’t receive that through Equifax.
Through my Discover account, I was able to see a 41 point “bump” in my credit score (I have access to my TransUnion credit score for free)! This could be due, in part, to my new secured Discover credit card I opened when I recently repaired my credit.
Anyone with questions, concerns, or feedback about the information provided on your credit reports or the submission of disputes is welcome to post in the comments below for expert feedback.