Your consumer credit report is the key to purchasing power with credit --- a credit report that is free of negative entries and shows a long history of on-time payments can help you qualify for car loans, lines of credit, credit cards and mortgage loans. If your credit report contains a negative entry that you believe was made in error, you can take steps to have the entry removed to preserve your credit score and maintain your creditworthiness.
Review Your Credit Reports
Periodically reviewing your credit reports can help you identify errors that can compromise your creditworthiness. You can obtain copies of your credit reports for free once every 12 months at AnnualCreditReport.com. Review the payment history for each account, as well as the public records section, to identify errors.
Collect Documentation
Before disputing an error on your credit report, you will typically need to obtain documentation supporting your position. For example, if your credit report contains an erroneous late payment, you can print out bank statements showing when you made each payment to the creditor, or call the creditor and ask for written verification that you made your payments on time. If the report shows an account you have never owned, contact the creditor and obtain a letter stating that you have never done business with the company.
Write a Dispute Letter
Compose a letter to each credit bureau reporting the erroneous information. State that the entry was made in error and explain why the information listed on your credit report is not correct. Ask the credit bureaus to investigate the entry to verify that the entry is erroneous. Make copies of the letters for your records, attach copies of your documentation to the letters and mail them to the credit bureaus. You may send the letters via certified mail so you can verify that the credit bureaus received them. You may also file a dispute with any of the three major credit bureaus online.
Investigation and Resolution
After a credit bureau receives your dispute request, it must complete an investigation within 30 days unless it deems your request frivolous. Once the credit bureau completes its investigation, it will notify you of its findings in writing. If the credit bureau agrees that the entry was made in error, it will remove it from your report and provide you with an updated copy of your credit report at no cost to you. At your request, it will also notify any person or business that has obtained your credit report within the past six months of the correction.
Considerations
If a credit bureau finds in your favor, you should send a copy of the bureau's findings, along with copies of your original dispute letter and documentation, to the creditor named in the erroneous entry. This may help prevent the creditor from reporting additional erroneous information in the future.
Also, if the credit bureau does not agree with you, you may still request the bureau to include your dispute letter in your credit file so future prospective lenders can see that you questioned the entry. This may compel a prospective creditor to give you an opportunity to explain the negative entry before issuing a lending decision.
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