How to Fix a Credit Report Mistake
It should be simple to dispute an error on your credit report, but it can be an arduous, time-consuming process. That’s why we recommend that you get copies of your credit report and scores from all three of the credit reporting bureaus – Experian, Transunion, and Equifax at AnnualCreditReport.com. Check meticulously for errors, and don’t assume that problems you’ve already corrected or delinquent accounts you’ve paid in full will automatically disappear from your report.
Why check all three bureaus? First, you’re not their customer – creditors are. Second, the three bureaus are competitors and do not share information. Third, you may have all correct information at two bureaus, and incorrect information on the third. Fourth, you can have different errors in all three bureaus.
According to a recent study by ConsumerReports.org, more than one-third of Americans found at least one error on their credit report, from personal data to account information. Account information impacts credit scores, the three-digit number that banks use as shorthand to greenlight, deny or raise the interest on a loan. Mistakes can include unrecognized accounts (41%), unrecognized debt reported to collections (26%), payment wrongly reported as late (23%) and payments wrongly reported as missed (12%). As scary as it sounds, deleted items can reappear on your credit report.
The landlord, credit company, or governmental agency that reports information to the bureaus is called the data furnisher. According to Experian.com, you can file a dispute with the credit bureau. The credit bureau contacts the data furnisher about the contested item. The data furnisher investigates and provides its evidence to the credit bureau, which either modifies the item, leaves it on your report, or deletes it. The process can take as long as 30 days which is too long if you’re trying to get a mortgage loan.
You can also contact the data furnisher yourself with your proof of final payment, the release of lien or whatever evidence you have and get a written statement of resolution from them. Give a copy to the credit reporting bureau and one to your lender via certified mail to make sure they get it. The process will still take up to 30 days, but meanwhile, your loan can go through underwriting, and you may be able to close on the home you want to buy on time.
Keep all copies of final payments, the release of liens and dispute resolutions in case a deleted item reappears. Why would it reappear? Experian explains that “the dispute resolution process allows for information to be removed from a credit report if, in response to the dispute, the furnishing party cannot verify it or doesn't respond to the credit reporting company's request for an investigation” within the 30-day time limit allowed by the Fair Credit Reporting Act. Incredibly, the credit bureau isn’t required to
permanently block an item from being reported, or “reinserted.” The furnisher can fail to respond to the 30-day limit, then reinsert the item, but the credit bureau must notify the consumer within five business days of the reinsertion.
Regardless of the outcome, the credit reporting company has to give you the results in writing and a free copy of your credit report if the dispute results in a change. Give a copy to your lender and keep a copy for your files.