Your Credit Report Is Not Always Accurate
A 2021 Consumer Reports study found that 34% of participants identified at least one error in their credit reports. The FTC has found that 1 in 5 consumers has an error significant enough to affect their credit terms. These errors — incorrect account information, payments incorrectly marked late, accounts belonging to another person, and outdated negative information — can cost you thousands of dollars in higher interest rates over the life of loans.
The good news: you have a legal right to dispute errors, and credit bureaus are required by law to investigate and correct them.
Getting Your Free Credit Reports
You’re entitled to one free credit report from each of the three major bureaus — Experian, Equifax, and TransUnion — every 12 months through AnnualCreditReport.com (the only federally authorized free report source — beware of look-alike sites).
After the COVID-19 pandemic, the bureaus have offered free weekly reports through AnnualCreditReport.com — check whether this extended access is still available. You can also get free credit monitoring and score access through many banks and credit card issuers.
What to Look For When Reviewing Your Reports
Personal information errors: wrong name spelling, incorrect address, mixed file with another person. Account errors: accounts that aren’t yours (could indicate identity theft), incorrect payment history, wrong account status (showing open when closed, or vice versa), incorrect balance or credit limit.
Negative items that are too old: most negative information can only appear for 7 years (bankruptcies for 10 years). If old items are still appearing, they must be removed. Duplicate accounts: the same debt listed twice inflates your apparent debt and suppresses your score.
How to Dispute Errors Effectively
For each error, gather supporting documentation — bank statements, payment confirmations, correspondence, account statements. Write a clear, specific dispute letter to the credit bureau reporting the error. Be specific about what is wrong and what the correct information should be. Include copies (not originals) of supporting documents.
Send by certified mail, return receipt requested. Keep copies of everything. The bureau has 30 days to investigate and respond. If they verify the incorrect information, you can also dispute directly with the original creditor (called a ‘furnisher dispute’).
What Happens After a Dispute
If the bureau confirms the error, they must correct or delete it and notify all other bureaus of the change. You’ll receive an updated credit report reflecting the correction. Request a corrected report be sent to any lender who pulled your credit in the past 6 months for employment purposes.
If the bureau ‘verifies’ information you know is wrong, you can add a consumer statement (100 words) to your file explaining the dispute, escalate to the CFPB with a complaint, or consult a consumer protection attorney who handles credit reporting cases — these cases are often taken on contingency.