Checking your credit report can feel like getting your report card as a child. It may hold some surprises if you haven't visited in a while.
Checking your credit report regularly (at least once a year) is the best way to keep your information accurate and score high. Experts agree it's not a bad idea to research a few months before making a big purchase. It may seem like a waste of time, but you can save yourself a lot of stress and potential financial trouble by carefully reviewing your report and correcting any mistakes.
This paper will teach you six techniques to fix credit reports and whether you can sue for credit report errors.
Table of Contents
What Is Your Credit Report?
Your credit score is one of the most critical numbers in your life and can be found in your credit report. The interest rate you're offered on a mortgage or car loan and whether or not you're approved for either are all determined by your credit score.
There are six main factors in your report that will determine your score:
- Derogatory marks
- Average account age
- Total number of credit accounts
- History of on-time payments
Your score will also be off if any of these details are off.
When an Error Appears on Your Credit Report, What Should You Do?
Fixing your credit report is not easy to do. You will go through many processes, and the days will be counted to correct the errors you found on your credit report. Why does it need to be fixed?
This is because when the day comes when you want to purchase expensive things or take a loan, the creditor checks your credit score to see if you are eligible for your purchase. A mistake or error in your consumer information can affect your credit score and cause you problems.
But don't worry because there are techniques for you to fix your credit report problems. What if your request to correct incorrect credit report information is not handled? In that case, you can sue the credit reporting agency for negligence.
You can leave the case you file to your credit lawyer so that they can take care of this concern. Your lawyer will help you to process the claim you filed immediately and to fix your credit information as soon as possible. It would be best if you did this so that you will not have difficulty one day when applying for a mortgage loan.
Under the Fair Credit Reporting Act (FCRA), you have the right to dispute information on your credit report that isn't complete or is wrong. You have the right to request an investigation into your claim of an error by a credit reporting agency and a subsequent correction or deletion of the incorrect, incomplete, or unverifiable information. If they don't, you have grounds for an FCRA lawsuit.
In fixing your credit report information, there are six techniques you should consider, and these are as follows:
Ask for a Copy of Your Credit Report for Free
You need access to your credit report to see what's on it before you can dispute anything. By using AnnualCreditReport.com, you can obtain a free credit report once every year from each of the three major credit bureaus (Experian, TransUnion, and Equifax).
An excellent way to monitor your credit report all year is to set a reminder to check in with a different agency every four months.
Be Meticulous With the Information
You should read the report carefully and entirely once you receive your credit report (which happens instantly). You can verify any information regarding recently opened lines of credit, missed or late payments on existing lines of credit, and challenging inquiry activity.
Mistakes that are Frequently Made
According to Margaret Poe, TransUnion's director of consumer credit education, some of the details listed on your credit report are more prone to error than others. She cites monthly balances as an example, claiming they are reliable so long as the larger picture presented by your credit report is correct.
Verify that the information reported about you is correct, including your name, address, date of birth, and social security number. Credit report mixing (when data from one credit report is combined with data from another) and identity theft are two common causes of inaccurate information.
Several types of errors can affect your account balance:
- Each revolving credit account has the wrong credit limit.
- Your credit report may include inactive accounts.
- Negative marks that have been on your credit report for longer than seven years.
- An overdue payment was given an incorrect delinquency date.
- Incorrect payment status, such as a credit account incorrectly reported as delinquent.
Incorrect information is reinserted.
If you have corrected inaccurate information on your credit report, it may reappear. Keep an eye on your credit report to see if any of the same mistakes you've had to fix have reappeared.
Contact Your Creditor
The best way to fix an error on your credit report is to contact the relevant creditor, such as your bank. To resolve the issue quickly and in your favor, having as much information as possible, including incorrect information from your report is essential.
File Dispute With Credit Bureaus
Contact the credit reporting agency that generated the negative report if you cannot resolve your issue through the source. Gather evidence to back up your claim that the item you're disputing is an error, such as a copy of your credit report with the highlighted error and a plan for fixing it.
Contact options include picking up the phone, going online, or sending a letter by mail.
If you are filing a dispute by mail, you can use the FTC's sample letter to notify the credit reporting agency of the inaccurate information. You can monitor the progress of your request by sending the credit reporting agency a form letter via certified “return receipt requested” mail.
Make sure you have backup copies of everything you submit.
You can also ask the credit reporting company to send correction notices to anyone who got a copy of your report in the last six months or for employment reasons in the previous two years.
Be Patient and Follow Up at the Right Time
Credit reporting companies usually investigate your dispute within 30 days unless they deem it frivolous. Upon completing the investigation, they will inform you in writing and send you a free copy of your report.
Make Sure That Your Credit Report Includes a Consumer Statement
Let's say it turns out that your request to have an error on your credit report is denied. Unfortunately, it's not uncommon for credit bureaus to ignore requests for information. Only 2% of covered complaints were resolved in 2021 across all three credit bureaus, down from 25% in 2019, according to a report from the Consumer Financial Protection Bureau from 2022.
If that happens to you, that's where your right from FCRA comes into play, and you can sue the agency or creditors for credit report mistakes and neglect of work.
Making a mistake on your credit report can have serious consequences. Bad credit can make it difficult to get loans and credit cards when needed and increase the amount you have to put down for things like rent and insurance.
If you want to keep your credit in good shape and make steady progress toward your financial goals, you need to closely monitor it, identify any discrepancies as soon as possible, and file a dispute.
Lastly, keep a clean credit history. If the credit reporting agency does nothing after receiving your dispute, you can sue for credit report mistakes under the Fair Credit Reporting Act (FCRA).