Credit report errors can happen to anyone. It affects roughly 25 percent of files in the United States. This statistic is high enough to cause alarm, and one in 20 files have errors that cause financial damage. A small percentage of these instances involve borrowers with wrongfully reduced scores of 100 points or more.
Check for Credit Report Errors First
If you’re concerned, check each of your credit reports (Equifax, Experian and TransUnion) to see if there are any incorrect entries. Begin by scanning for information that doesn’t line up properly. There might be different balances, payment dates or your account might not even show up.
Keep in mind: credit-reporting companies are only required to provide information to one of the three bureaus. It’s possible to have details and accounts on one file that aren’t on the others. This is a leading cause of credit report errors and it’s not always easy to fix.
You can get your files from www.AnnualCreditReport.com, the government-authorized source for your free annual report. This is a right for American consumers, thanks to the Fair Credit Reporting Act (FCRA). If you’ve already requested a file and you want more current information, you can pay a nominal fee to each bureau for a fresh copy.
Common Types of Credit Report Errors
Sometimes, a credit report error is because of an innocent mistake by one of your credit card providers or lenders. Other times, it might be a mishap with your work’s accounting department. Worst case scenario, the errors on your report are a sign of credit fraud or identity theft.
Regardless of the details, any wrongful entries on your credit report should be taken care of immediately. If not, it’s possible for the negative effects to carry on for years — while keeping your credit score down in the process.
Take a look below for some tips on clearing up certain types of errors.
How to Handle Mismatching Credit Reports
Unfortunately, you can’t force the reporting company to notify the other bureaus if they only reported to one. This can put you at both an advantage and a disadvantage.
It’s beneficial if you have negative items and they only show on a single file. However, it can be a serious setback if your positive items are not there. It can result in your FICO score dropping — which means more rejections and higher interest premiums.
Your best bet is to contact the credit-reporting agency. You can request that they report to the other bureaus. If they won’t, there’s little you can do, “by force,” to make it happen for you.
How to Remove Outdated Information
Your credit report can only contain negative items for a set time frame. After the period runs out, you’re allowed to request removal of any items that still show. To do this, you must send a dispute letter to the respective credit bureau(s). This is also the standard process for dealing with errors. Outdated information is different since it’s so easy to check and prove, so no further information is needed.
You’ll hear back in 30 days or less with a decision. If you have a delinquency stated on your file, inside the acceptable reporting period, you’ll have to prove to the bureau that it’s incorrect. In most cases, this happens when debt goes to a collections agency — as it gets reported with a delinquency, inaccurately, on a more recent date.
How Long Does It Take to Fix Errors?
The FCRA states that the credit bureau you send the dispute letter to must get back to you within 30 days. They’re required to investigate your claim and determine whether there’s any accuracy to it. The simpler issues tend to get fixed right away, but it’s possible you’ll be asked for more documentation.
Should You Use Credit Repair Services?
Credit repair companies focus on fixing your credit report, not your score. The goal is to make sure that all information matches up between each of your credit files. It means an expert will work with you to go through all your credit reports. They’ll have a much better eye for finding errors.
However, most of the time, you can identify the errors yourself. It only becomes important to consider hiring a credit repair agency when fixing the problem. This will save you a good 30-60 hours in paperwork, phone calls and other tedious processes. It also means you have a greater chance of removing the error, as your case will be represented as best as possible.
Credit report errors are always a headache. However, you don’t have to stress over the situation too much. Credit repair professionals can take all the manual work out of the reparation process. The law is also by your side when it comes to removing inaccurate negative items.
Things will only get more confusing if you’re dealing with fraudulent entries. In this case, you might need to supply police reports, FTC Identity Theft Affidavits and much more. The problem could take 100s of hours to resolve as well, which is when a credit repair expert can really save the day.