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A Step-by-Step Guide to Fixing an Error on Your Credit Report

Portrait of a young smart business womanYou work hard to be responsible with money.  You pay your bills on time; you try to pay off your credit card balance each month; you earn a decent living.

Yet, how is it possible when you pull your credit report, that you have a credit score similar to someone who is overextended, makes late payments, and sometimes even misses payments?

The answer may be simple–an error on your credit report.

How an Error on Your Credit Report Can Affect You

CBS News reports that the National Association of State Public Interest Research Groups “discovered that 79 percent of all credit reports contain some type of error – and 25 percent contain such serious errors that those individuals could be denied credit.”

Keep in mind, an error on your credit report, especially a serious error, may not only cause you to be denied credit, but also could hurt your job or apartment search as more and more companies are checking credit reports in their hiring and renting process.  A bad credit score can also cost you more in insurance premiums.

How to Fix an Error on Your Credit Report

The first step in maintaining a good credit score, besides the obvious of behaving responsibly with your credit, is to keep tabs on your credit report by ordering a free copy of your credit report (and paying a little extra to also get your credit score) at annualcreditreport.com.

Likely, you will find errors on your credit report.

Here are the steps you’ll need to take to correct the errors on your credit report:

1.  Notify the credit bureau whose report contained the error.  While you can do this online, it’s best to notify them in writing.  Send the letter via certified mail with return receipt requested so that you have proof that they received the letter as well as the date that they received it.

2.  Include documentation with the letter.  It’s not enough to simply write a letter to the credit bureau stating there was an error.  Instead, attach a copy of the credit report you received with all the errors circled in red.  Then, include evidence that what is reported is not correct.  For instance, if your report shows that you still have a student loan open and you actually paid that loan off, include a copy of the statement showing when you paid it off and that the balance is zero.

3.  Also send a letter to the offending party.  In addition to sending a letter to the credit bureau, also send a letter to the credit company that reported inaccurate information.  For instance, in the above example, you would also send a letter to the company that reported you still owe a balance on your student loan.  Include a copy of the documentation that proves it was paid off.

What To Say In Your Letter

You can write a simple letter to the credit bureau that includes your full name, address, and social security number.  Briefly and concisely explain the errors and why the information is faulty.  Also state specifically that you want the information corrected.  (If you’d like to see a sample letter, you can find one here.)

The Next Step

The credit bureau has 30 days from receipt of your request to investigate the error.  If they fix the error, they will also notify the other two credit bureaus.  In addition, they will send you a new copy of your credit report showing that the error has been fixed.

You can also request that the credit bureau send letters to anyone who has requested your credit report in the last 6 months to notify them that an error has been corrected.

What Happens If the Problem Isn’t Fixed After 30 Days?

However, you may receive no response, which is actually good news for you.  Under the Fair Credit Reporting Act, if the credit bureau does not respond within 30 days, they must remove the offending item.  You can send a letter reminding them of their legal obligation.

Alternatively, the credit bureau may dismiss your claim as frivolous.  In this case, you can simply start the process over again.  Send them the letter again and wait another 30 days.

Finally, the credit bureau may state that they have begun the investigation.  In this case, you must wait for them to complete their investigation.

What Else Do You Need to Know?

Fixing an error on your credit report can be a long process.  Sometimes the process is smooth, and other times it can escalate all the way to legal action.  The most important thing to remember is to document everything you send.  If you call, document who you talked to, what time the phone call was made, and what was said.  Documentation can support your claim should you need to take legal action to get a problem resolved.

The next important thing to remember is that you should always retain your composure.  The process may be frustrating, but don’t yell or make demands.  You’ll get much further by being both nice and reasonable.

Finally, remember that this process can be resolved in 30 days or less, or it can go on for several months.  Before you plan a big purchase, such as applying for a car or home loan, first order your report and fix any errors.  You’ll improve your chances of not only getting a loan but getting a great interest rate.

Readers, have you had success fixing an error on your credit report?  What was your experience?

 

If you are interested in credit repair, there are professionals out there who will work towards improving your credit so that you can get approved for loans, receive lower interest rates (and save thousands of dollars), and more. CreditRepair.com will help you create a game plan to improve your credit score, they will contact credit companies directly on their own, they will communicate with the credit bureaus to work towards making a change, and they provide an online dashboard that will help you monitor everything that is going on. It is all very affordable and will most likely save you thousands in interest fees and late charges.

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