Negative marks and errors on credit reports can make it more difficult for borrowers to receive mortgages, credit cards, or to secure certain types of jobs. Fortunately, there are methods for correcting erroneous and derogatory marks on your credit report. Our guide will explain the basic steps required to challenge errors.
Step 1 – Request a free credit report: Under the Fair Credit Reporting Act, Americans are granted one free consumer report from the three credit agencies (Equifax, TransUnion and Experian) each year. Pulling your annual credit report should be the first step in spotting errors.
Step 2 – Analyze your credit report for errors: Once you have received your credit reports from the three agencies, it is time to start searching for errors. For example, late payments or collection accounts that you do not recognize. Be sure to go through all three credit reports very carefully. Some negative marks or errors may only exist on TransUnion, and not Equifax or Experian reports.
Step 3 – File dispute letters: In many cases, you will have to file disputes separately for each error. Once you have gathered the errors from your credit report, you have the option of filing disputes through the mail or online with each of the agencies. Dispute letters are explanations for why you believe specific derogatory marks are erroneous. When writing these letters, be descriptive and accurate. Make it easy for the credit agencies to find the mistakes. It helps to file documentation supporting your claims along with the dispute letters (such as copies of payment records, court documents or other paperwork). If you are mailing the dispute letters with documentation, do not forget to include your return address. The credit agencies have a 30-day window to take action on disputes.
Why You Should Be Cautious of Credit Repair Companies
Some people genuinely lack the time to challenge errors on their reports, and might believe companies offering credit repair services are better suited for the job. While some of these companies are legitimate, others may take advantage of people facing desperate financial situations. Companies that promise a specific rise in credit score points or ask for upfront payments are not to be trusted. If something sounds too good to be true, it very likely is too good to be true.
Removing errors from credit reports can take a long time and a lot of patience. For some people, it may be worth the effort to alleviate difficult financial or employment situations.
The Sader Law Firm is a Kansas City bankruptcy law office dedicated to helping people burdened by excessive consumer and business debt.