How to Dispute a Charge on Your Credit Report

For most of us, even with the best of credit scores, we find ourselves at one time or another finding a blemish on our otherwise perfect credit reports. Often times the unscrupulous manner in which this is done is grounds for actual legal action, at other times, while the actual reported item may be valid, there are ways to minimize the impact it has on your overall credit and future lenders.

Instructions

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Perhaps you recently were turned down for credit? Perhaps recently one of your creditors wrote to you and told you that you no longer have "full privileges" as before or that some terms of your agreement have changed? Maybe you simply just wanted your yearly free credit report and lo and behold you see this blemish on your record.

As stated, the negative report may be valid, or it may not be. Often times these reports are medical and you cannot, for the life of you, figure out from where it came. This is often the case for those of us with very good credit. Medical bills on the credit report, in the opinion of this author, ought to be made illegal. That said they are not. Unscrupulous doctors and facilities will often inflate prices, send bills you were not even aware of directly to collection and agencies, ILLEGALLY (by law you are supposed to get notification prior to it ending up on your record) place it directly on your report.

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Right or wrong the negative mark is there. So now we are stuck with how to get rid of or minimize the blemish.

First and foremost if it is a valid charge but has gone to collection you need to know that unless it is an internal agency the debt has been sold. You can no longer go to the original creditor and negotiate. The good news is that the sales price was pennies on the dollar and the debt collectors are working on a commission. So let's say it is a valid debt for 5,000 dollars-well then what can you afford? Think of a sum you can afford NOW and tell them that you are willing to pay that sum NOW ONLY if they are willing to remove it from your credit report and as soon as you get a letter to that affect you will make said payment in the negotiated amount agreed upon.

If the debt is unknown, invalid, or had previously been disputed or settled with the original creditor, you are in a better position. In this situation you simply order your FREE copy (any time a negative on your report affects your credit chances with a third party you have a right to review your report) and you ascertain what the charge is. Experian, though the Equifax and Transunion are not much better, is the worst.

You will need to order a report, then wait for it to arrive, then you need to see the charge. Unfortunately by the time some of these charges get onto a report all the evidence of a settled dispute is long gone. Either way, immediately dispute the charge. The agency has an obligation to go to the collection agency and verify the validity of the charge, if they cannot, it MUST go. If they can prove it, it may well stay. The harder you fight, even a valid debt, the more likely you are to win. Often times, knowing it is pennies on the dollar they paid and you absolutely will not pay is enough to get the collection agency to just drop it, especially a third party collection agency.

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Now often Experian, Transunion and Equifax share information, make sure that none of the negative has spread like cancer. You may also need to contact the debt collector themselves. There are stringent rules which are set to get tougher and you should know them. The FDCPA is a good place to start, if you did not get a letter 5 days prior to them reporting this, you already are up 1000 dollars, yes if you sue, and trust me they likely have broken this rule and more, then for each infraction they owe YOU 1000 dollars. You can sue on your own and by the time you are done have more money than what you owed to begin with.

KNOW your rights.

Finally, if all else fails and the debt is valid but there is any reason you did not pay off your debt, you have the right to make a comment on your own credit report. For example "This debt was negotiated/disputed with the original creditor who chose not to respond and was unlawfully sent to a credit agency that has broken multiple rules and I am in the process of seeking legal recourse against them."

Anything that negates your responsibility for a debt can only help you.