How can I resolve a dispute in a credit report? A step-to-step guide

If you notice any error on your credit report, try fixing it as soon as possible. According to the stats, around 25% of Americans have errors in their credit reports. Moreover, in a follow-up study of the federal trade commission: 

“Around 70% of consumers still believe their issue is unresolved even after starting a dispute.”

The information on your credit report profoundly impacts your day-to-day life. For instance, it can affect buying power, the chance to get a job, an insurance plan, or the effort to rent or buy a house. So, if the information isn’t correct, immediately start a dispute. You will have to follow a step-to-step process to resolve the conflict. 

How do errors on credit reports affect you?

It’s necessary to keep an eye on a credit report because sometimes it could be filled with errors. A false report can adversely affect the credit score, so monitor it closely, even if you are an independent contractor. The credit report contains all types of information like how you pay bills and even bankruptcy records. But if you don’t pay attention, it can negatively impact your credit score. If you want to resolve errors, then first understand mistakes, and find ways to fix them. Usually, the error occurs because the information you provided is wrong. So, if you find any error, immediately start a dispute with the credit reporting companies like Equifax, Experian, or Transunion. Here are the following steps that you will have to follow to create a disagreement: 

Identify the errors in the report: 

It’s better to check your credit report periodically because, in this way, you can identify errors on time. Three major credit bureaus, Equifax, Experian, and Transunion, provide free credit reports. Here are a few common mistakes that you will find: 

• A wrong name, address, and phone number 
• The report contains information that belongs to another consumer who has a similar name 
• Account attributed to identity theft 
• Incorrect report as an account owner when you are just an authorized user 
• The amount that you have paid but still shows as unpaid 
• The same debt was included in the report more than once 
• Incorrect balances and credit limits 

Credit errors aren’t widespread, but they happen; that’s why you should check accuracy. The best thing is to file a dispute with each bureau separately to ensure the problem has been resolved everywhere. 

Gather documents to file a dispute: 

If you are confused and don’t know details about income and taxes, then take the help of paystubs. In this way, you can identify tax deductions and the total amount for which you filed taxes. However, after finding discrepancies, the next step is to gather supporting documents that can prove your point. You need documents like:

But these papers could be different depending on the errors in your credit report. If you have more supporting documents, then it will speed up the process and help to resolve disputes early. 

File a dispute: 

After gathering all the papers now, it’s time to begin actual work. Here are the following ways that you can use to file a dispute: 

All three ways are easy, but we prefer to dispute online or by mail because, in this way, you have proof of the campaign. In addition, the CFPB recommends sending a letter via certified mail along with a return receipt. This way, it will be easy to track your letter’s receipt. 

Allow time for inquiry & review report: 

Credit report bureaus don’t issue any judgment without investigating the whole matter. So, allow them some time; usually, it takes less than 30 days to process. However, after reviewing the following scenarios could happen: 

You can take aggressive action if the bureau refuses your claim, but you still believe the information is incorrect. For instance, you can contact the creditor, file a complaint, open another dispute, or file a complaint against the creditor. In addition, you can act by complaining to the state consumer protection agency. 

Check your final report: 

If the bureau has agreed, but your report isn’t showing the updated information, then don’t worry, as it takes time. Instead of worrying, you should monitor the report regularly to ensure that change is made. Still, if you can’t see changes, contact the credit reporter to ensure the information is updated. Moreover, report if you notice any scams, fraud, or bad business practices. In this situation, go to the official website of the FTC and file a complaint. 

Conclusion: 

Credit report errors don’t look like a big deal, but these mistakes can cost you in the long run. For instance, errors can cost you while applying for a credit card, mortgage, or auto loan. Disputing a false report is a process that takes time. So, consumers need to stay persistent, organized, and disciplined throughout the process. After eliminating errors, you can improve credit health after eliminating mistakes, and ultimately, it will help save on loans and interests.