Charles H. Miller
According to the Federal Trade Commission estimates, some 5 percent of Americans have errors on their credit reports that can result in adverse loan terms. If you happen to be in that group, you should know how to fix that so you can get better rates on any loan you may need. In addition, a lower credit score could also mean denial of job offers as well as higher insurance rates.
If you think there is an error on your credit report — you’ll want to fix it as soon as possible. But first, you will have to see that error for yourself…
Check your credit report
Before anything else, you should be 100% confident there is indeed an error in your credit report. And thanks to the 2003 Fair and Accurate Credit Transaction Act (FACTA), you can do that for free once per year. Go to AnnualCreditReport.com and ask for it — you’ll get reports from each of the three major credit reporting agencies. If you need to check your credit report more often, you’ll have to pay for it — visit myFICO and TransUnion.
If you see an error, it’s time to take action. Read on…
Disputing an error on your credit report
We list 5 steps here, but in most cases you will fix the error with just the first step.
1. Filing your dispute
Do not use the automated system to submit your dispute — do it manually at the same time with both the credit issuer and credit bureaus. Here are the links to credit bureaus’ dispute filing forms: Equifax, TransUnion and Experian.
2. Sending documents
When asked to send documents, do it using certified mail, with return receipt requested. This way you will know that the recipient(s) actually received your letter.
3. Wait at least 30 days
In most cases, your dispute will be resolved. However, if you don’t receive the satisfying response 30 days after you have filed the dispute and sent the documents required, it is time to make re-dispute, again with both the bureau and the credit issuer. In other words, repeat the first step with a note that you are doing this for the second time.
4. Contact the Consumer Financial Protection Bureau
After another 30 days with no satisfactory answer, contact the Consumer Financial Protection Bureau for help. It is a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly. Click the “Submit a Complaint” on their site and explain your situation. If they can’t help you, it’s time for the final step.
5. The lawsuit
This is where things get ugly and as we said it earlier — in most cases you won’t “reach” this step. After you have submitted and resubmitted disputes, and haven’t received a valid explanation why you can’t fix the error on your credit report — file a lawsuit through the small claims court. As part of this process, you will have to find out where the registered agent of the credit issuer and the credit bureau is in the state you live in. Call your state’s corporation commission, which you can find by googling “STATE_NAME corporation commission” — then serve those registered agents with the lawsuit. Usually though, the offenders will back down and remove the black mark from your report before the court date.
Ready to take action?
As we said a few times here, in most cases you will only have to take the first step. If something goes wrong, chances are you won’t move beyond the third step. Nevertheless, it is good to know all the options that are available to you. At the end of the day, you do want an error-free credit report, that has only the things you are responsible for. So take all the steps needed to make that happen. Good luck! 😉
