Got a minute to check your credit? A recent
out of every 5 Americans has a mistake on his or her credit report. Worse, about 5 percent had errors so serious
that they cause the consumer to be overcharged for everything from credit cards to car insurance and car loans.
The good news: When the 5.2 percent who had really serious mistakes on their credit
reports actually challenged those errors with the credit bureaus, they were able to improve their credit score
What causes credit report errors?
Mistakes can show up on your credit report in several ways. Maybe the creditors
sent incorrect information to the bureaus about your bill-paying habits as a result of a faulty automated process.
Maybe a social security number was keyed in wrong and you’ve been mixed up with someone else. Or perhaps you were
the victim of identity theft.
5 Steps to Fixing Credit Report Mistakes
Whatever the reason, no one will fix those errors if you don’t find and dispute
them! Follow these five steps to resolve credit report errors:
Step 1: Order a copy of your credit report to review. Visit
AnnualCreditReport.com, where you can order your credit report free once a year from all three major credit bureaus
(Experian, Equifax and TransUnion).
Step 2: Review your credit reports closely. Look for things like
addresses you’ve never used, odd versions of your name, the wrong date of birth or incorrect social security
number. And in the section about who has accessed your credit information, look for
applying for credit with.
Step 3: The paper trail starts here: Make a copy of the front page
of the credit report and the page(s) with errors and highlight them. Make multiple copies of whatever evidence you
send the credit bureau. And if there is more than one error, number them so you can refer to them by number in your
Step 4: Write the letter to the credit bureau to dispute the
error. Don’t use an online form: They often don’t allow you to attach evidence or fully explain the situation, and
may require you to agree to arbitration clauses that aren’t to your advantage. And if one of your creditors is
responsible for the mistake, send them a similar letter. Be very clear about what you’re disputing, such as “I
never applied for an account with that company” or “My payment was never late, and I’ve attached proof.”
Step 5: Document everything from paper copies of your
correspondence to a phone log with the names of anyone and everyone you spoke to, the date, and what was resolved
in the phone call.
If your dispute goes on for months and doesn’t seem to be getting anywhere, use the
National Association of Consumer Advocates website to find a lawyer with
experience in Fair Credit Reporting Act cases. But most of the time, that won’t be necessary. Credit bureaus
usually correct errors fairly quickly, and within months, your credit rating should show improvement – and that
helps save you money in all sorts of ways! So be sure to check your credit report once a year to find and fix