How To Deal With Errors On Credit Reports

An alarming number of credit reports have errors in them. According to one study by the Federal Trade Commission, roughly 1 in 20 are affected. Worried? If not, you should be. Credit reports can represent you in a number of ways. Employers, landlords and lenders can examine your files to determine whether or not they want to do business with you. Given how important credit reports can be, everyone should take steps to make sure they are represented accurately and error-free.

This brief guide will show you how to check for errors on your credit report, and how you can deal with any you find.

Checking For Errors On Your Credit Report

Everyone should get into the habit of checking his or her credit report annually. If you don't, you'll never find out if there is a mistake on your file. Removing these errors is one way you can quickly and easily raise your credit score.

The first step is to get your hands on one. Luckily, there are a number of ways you can get a copy of your report. The most accessible one is through the government operated website AnnualCreditReport.com. You can request one free copy of your credit report per year from each of the three major credit agencies - Equifax, Experian, and TransUnion.

Those who are very concerned about errors or identity theft should consider a more premium option. For a fee, credit monitoring services allow you to check your credit report several times per year. The paid services also go one step further, and will actively monitor your report for you. They will then alert you to any new activity or items popping up in your credit history.

In recent years, a few services have been set up to allow you to monitor your report for free. The downside to using these companies, over paid ones, is that they tend to be more superficial. Free credit monitoring options will generally allow you to check your credit score, and a limited number of items on your report. Most of these companies will also not report new activity to you. Therefore, you will need to log in yourself, and actively monitor your own report, if you want to catch suspicious activity.

Once you have a copy of your report read through it carefully. Be on a lookout for any unfamiliar accounts, debts and addresses. These are the red flags that could mean one of two things; there's a mistake in your report or you've become a victim of identity fraud.

Correcting Errors

Found something you believe to be a mistake or fraudulent? There is an easy system set up for correcting this. First, send a certified letter detailing the problem to the appropriate credit-reporting agency. Make sure the letter is certified - this way you have proof that the complaint was submitted. Second, make sure your letter has all the following items:

  • Your name, address, and social security number
  • Any relevant documents
  • A copy of your credit report
  • A clear and detailed explanation of the issue at hand
  • Evidence supporting your claim, if possible

You want to be complete and thorough with this process. Also, make sure to only send copies of the items listed above. Keep the originals, in case the letter or documents are lost.

If you do not hear from the companies you reached out to, we recommend contacting the Consumer Financial Protection Bureau (CFPB). By filing an online complaint, the agency can follow-up with the credit bureaus on your behalf. Without their intervention, some consumers reported the process can take over a year to complete. Don't wait this long. If you haven't received any confirmation or update in over a month, contact the CFPB.

Once an error is corrected, the credit reporting agencies must contact anyone who pulled your file in the last six months and inform them of the error.