Can a mistake on your credit report really make a difference in your financial life? The answer is yes. Even one mistake can make the difference in being approved for a loan at a good interest rate, getting approved for a credit card, or can affect the amount that you will be required to put down on a home.
The Consumer Protection Bureau has stated that over 80 percent of all credit reports contain at least one mistake and that over 60 percent contain three or more mistakes. These mistakes may be found on one report or may be included on all three, depending on how the mistake was made. It is imperative that everyone take the time to review each of their three major credit reports to ensure that the information is accurate.
Common Mistakes Found On Credit Bureau Reports
The credit bureau reports contain a significant amount of information about you and your finances. You will need to check the report for the following potential mistakes:
- Inaccuracies in your name, middle initial, or designation (Sr., Jr. III, etc.). Make sure that your name is not being spelled differently due to a typo or by being confused with other people.
- Inaccuracies in your current or previous addresses. Addresses that are not even close to anywhere that you have lived should be a warning sign of potential identity theft or having your account mixed up with someone with a similar name.
- Verify that all of the listed current and closed accounts are actually yours.
- Check payment histories of these accounts to see if any are listing you as being late or behind.
- Look at any collection accounts to see if they have been repeated by other collection agencies.
- Verify any collection accounts that have been paid off but still remain as unpaid on your account.
- Check accounts that you are an authorized user to make sure you are not listed as an actual account holder that is responsible for paying the debt.
- Look for multiple entries of any same account.
- Check for inaccuracies in credit limits and balances.
- Look for negative information that is over seven years old.
What To Do When A Mistake Is Found In Your Credit Report
If you have found any types of mistakes in your credit bureau reports, you must take the following steps:
- Notify in writing using the correct credit bureau dispute forms that an error has been found, and you wish to have it investigated. You will send this to each of the credit bureaus where the error is listed.
- Provide any proof that you have that this information is incorrect.
- Send this information by traceable means to each credit bureau that has mistakes. Make sure that you are sending copies and not originals of any supporting evidence.
- Wait for the reply from the credit bureau. By law, they have 30 days to investigate plus mailing time.
Under the guidelines of the Credit Protection Act, you also have the right to contact the company that is inaccurately reporting the information and request that they make the changes to your credit reports. However, these agencies do not have the same deadlines to follow as the credit bureaus, and this may take a significantly longer time to correct the mistakes.
Make Sure Your Dispute Is Valid
It is very important that you only dispute valid errors on your credit report that you can prove are wrong. If the credit bureau finds that the disputes you are filing are frivolous, they can decline to investigate your requests.
Additionally, opening up a dispute directly with a collection agency may bring about aggressive collection activity if they feel that you are trying to get out of paying your debt.
Keeping your disputes to actual errors will make the process run smoother and will be most beneficial to you in the long run.
Once the errors have been investigated, the credit bureau will notify you in writing of their finding and send you an updated copy of your credit bureau report with any changes that they have made.
You can request that the bureau notify anyone who has pulled your credit bureau report in the last six months of these changes.
If the investigation still does not result in a correction, you can appeal directly to the Consumer Credit Protection Bureau. You must submit all of the information to prove your claim and the information provided by the credit bureau. The CCPB will notify the credit reporting agencies of your dispute, and they will have 15 days to respond. At that point, your corrections should be complete.