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April 20, 2021

How to Contest an Entry on Your Credit Report

 

The effects of negative information on your credit report can be dramatic. When you are on the bubble for a loan, even one missed payment can make the difference in how your application fares. The good news is that credit bureaus are legally required to give you a say. They cannot simply include anything that they want on your credit report without hearing your objections if you have them. Here are some tips for reporting credit disputes.

Order Your Free Credit Reports

The first step toward disputing something on your credit is actually knowing what is on your report. The three credit bureaus are legally obligated to give you one free credit report each every 12 months. Make sure to take advantage of this opportunity, and space your reports out during the year. Scan the report for any entries that may be inaccurate.

Where You Can Open a Dispute

Each of the three credit reporting bureaus will have its own process for disputing an entry on your report. They give you the choice of starting the dispute process either:

  • Online
  • By mail
  • By phone

Whichever way you choose, keep documentation of the process, including the information that you provided, the decision that was made and the date of the decision. You may need these in the future. If you send these by mail, use a certified letter to keep a record.

Writing the Dispute Letter

In terms of the actual dispute, you are not expected to reinvent the wheel when it comes to writing the letter. There are resources that can help you write the letter, including a form letter from the Federal Trade Commission.

You should go into enough detail to show the credit bureau why the negative entry is wrong. When possible, include documentation that supports your story because they would likely believe the creditor if it was your word against theirs.

There are four general things that you should include in your dispute letter:

  • The item in dispute
  • The relevant facts
  • Why the creditor is wrong
  • The correction that you want or a request to remove the item from the report

Chances are that this negative credit entry would be on your report for each of the three credit bureaus. Therefore, you must file disputes with all of the bureaus or at least those whose reports have this information.

You should also send a dispute letter to the creditor. They should consider whether they will keep reporting this information. If they do, they must include a notation on your report that you are disputing the entry.

The Credit Bureau’s Dispute Decision

The credit bureau must fully consider all of your information. According to the law, they have 30 days to issue a decision. They will inform you whether they have decided to remove the entry or at least correct it. If they delete the entry, they cannot put it back on your credit report. Then, they must send you a new free copy of your credit report that does not count as your annual free credit report.

The credit bureau will decide whether the disputed entry will remain on your report. If they rule in your favor, the negative information will be removed. If their decision goes against you, there is still the opportunity to engage further with the creditor that put the information there.

Creditors also do not have an unlimited right to put negative information on your report. If they harm your credit with inaccurate information, they could be legally liable in a lawsuit should you choose to file one. Therefore, they have an interest in making sure that they have not erred. You can discuss your situation with them and give them evidence of why they made a mistake in the hopes that they can take the entry off your report.

Writing Your Own Statement of Dispute on Your Credit Report

In the end, you may not persuade the credit bureau or the entity that put the information there to see things your way. You still have a way to get potential creditors to hear your side of the story. While they would certainly give weight to the fact that the negative information is there, they may consider the whole picture before they make a decision whether to give you a loan or credit.

You have the legal right to enter a statement of dispute on your credit report. This would remain on your credit report so others could see it when they are reviewing it. The statement would basically explain why the negative credit entry is wrong. The potential creditor may ask you for more information or documentation to learn more about what happened.

Consumers should be very vigilant about their credit and disputing invalid information. The entire process that we outlined above costs you nothing. It is your legal right and a process that the credit bureaus must provide as part of doing business. Of course, staying on top of payments as they are due and taking steps to repair your credit on your own will only help you in the long run.

Your credit is everything to you and will have a large impact on what you want to do and your life. Be vigilant and know that you are not completely powerless when something wrong appears on your report. You can do something. Feel free to contact us if you have additional questions.