Credit disputes are a legal right given to consumers by a law called the Fair Credit Reporting Act. The Federal Trade Commission explains that disputes do not cost anything and force the Equifax, TransUnion and Experian credit bureaus to eliminate mistakes from your records. Often the errors involve delinquent payments and other harmful entries, according to Motley Fool finance advice writer Dayana Yochim, so disputes are an effective credit repair tool.
Free Credit Reports
Dispute as many items as possible on all three of your credit reports. The FTC advises that you can check those files for free every year if you use annualcreditreport.com. The government makes the credit bureaus provide free reports through that site every 12 months to any consumer who makes a request through the online form or the toll-free telephone number listed on the site.
Written Disputes
The credit bureaus tout online disputes through their websites as quick and easy, but the FTC recommends sending letters instead. Online forms do not always send a submission confirmation, and you have no way of knowing whether they were really received. Letters can be sent from the post office using certified mail, and you can ask for a dated delivery receipt. The FCRA gives the bureaus 30 days for their dispute investigations, and postal receipts prove the start date.
Documentation
The FCRA does not force you to send any documentation of your dispute claims, but it also gives credit bureaus the right to refuse investigation of irrelevant or frivolous queries. Include document copies with your letters backing up as many of your disputes as possible. Use evidence like account statements, check or money order copies, bank statements and loan contracts. Cross-reference each piece of proof with the correct item in your letters. Always sent copies instead of the original documents, the FTC advises.
Direct Disputes
Sometimes creditors provide documentation that satisfies the credit bureaus, which keeps them from erasing the disputed item. You can redirect such challenges at the lenders if you do not believe their proof is valid. Use one of your credit bureau letters and alter it so it is relevant to a direct dispute. Ask the creditor to stop reporting the information to Experian, TransUnion and Equifax.
Consumer Statements
You have a right to include a personal statement of 100 words or less in all three credit report files if you do not get satisfaction from your disputes, the Divorcenet legal information website explains. Write a separate statement for each credit bureau that explains your side of the dispute and mail them to the address shown on the bureau websites. They are obligated to give a copy to everyone who gets your credit reports, according to the Federal Reserve Bank of San Francisco.
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