How to Resolve Credit Bureau Reporting Errors

A couple months ago my wife and I started a passive search for a new home.  We are looking to downgrade to save a bit on the mortgage, and have more money each month to put towards meeting our aggressive savings goals.  When starting the house hunting process it is a good idea to check your credit report to make sure things are being reported correctly.  Inaccuracies discovered late in the game could jeopardize the approval of your mortgage, and the ability to close on a new home.

Skeletons In Your Credit Closet?

Often times consumers have legitimate, negative blemishes on their credit history that are being accurately reflected in their credit file.  For these types of items there isn’t much you can do, but wait.  The earliest most accurate, negative information can be removed from your credit file is seven years.  However, if you are like me, and find an inaccuracy in your report is dragging down your FICO score, there is something you can do about it.  I had to contact a certain unnamed bank that may or may not be represented in the picture above to get an issue resolved with an inaccurate item on my credit report.  In addition to dealing with the bank directly, I also disputed the item at all three credit reporting agencies.  Here a few steps to take to resolve inaccurate information being reported on your credit report.

Steps to Resolving Credit Report Errors

Contact creditor and notify them of the inaccuracy.  Creditors reporting data to credit reports have the ability to wipe clean inaccuracies in your file by submitting what’s called a Universal Data Form (or U-Data Form).  Ask for the creditor to correct their records, update your data with all three major credit reporting agencies, and notify you in writing when the process is complete.  Creditors update credit bureau files every month, or every quarter, and if you don’t notify them of the inaccuracy it could wind up right back on your credit file weeks after getting it resolved through the credit bureau.

Write a letter to the credit reporting agency.  In the letter, identify the account that is reporting inaccurately, give a brief explanation why you believe the record is incorrect, and sign and date the letter.  Be sure to include a copy of any relevant documentation you have from the creditor indicating this was a mistake.

Time is on your side.  According to the federal Fair Credit Reporting Act, credit bureaus have 30 days to remove the record from your file, or provide you proof that the account is reporting correctly.  Occasionally, creditors or reporting agencies miss this window and the information has to be removed, but if it is legitimately being reported by the creditor often times it will reappear.  This strategy is commonly used by these “credit repair agencies” that are usually nothing more than a scam disguised as a legitimate service.  If you legitimately owed a debt, and were late paying on that debt, then there is nothing you can do to have it removed from your record, other than wait the required period of time.

Send correspondence via certified mail, return receipt requested.  The 30-day ticker starts when the bureau receives your letter, and the signed receipt is your proof that is was delivered.  Be sure to stash it in a safe location while waiting to hear back from the credit bureaus.

Stay safe with credit report monitoring service that alerts you within 24 hours of changes made to your credit report.

Comments

  1. Having done a lot of research myself into FICO records and scoring, I’ve found that almost never will they actually remove a record from your credit history. Only in cases where it is 100% provable that it wasn’t you who mishandled your credit (i.e.- someone who opened an account in your name but in a completely different area) do they actually remove the entry. They usually just add an addendum to the entry stating that it was disputed along with the related documentation that you sent it. It is ultimately up to the creditor to determine if the entry should be taken into account or not when extending you credit.
    FYI – the 30 day limit is from when the item was reported and the supporting information sent in. Once they receive the information, it could take them up to 30 additional days for the bureau to remove the entry.

  2. My simple suggestion is get rid of your credit cards COMPLETELY. Most of my problems were due to my credit cards and my infatuation with using them to buy shoes.

  3. I bet if people were constantly monitoring their credit card statements and status, less people would have credit card woes. Then again, few people have the time to always be on the look out or are unable to make a habit of it. There are many options out there that should be utilized that can act as a third eye and spot any problems or potential ones.

  4. It’s a good idea to check your credit bureau report regularly at least twice a year and not only when you are looking for financing. With identity theft increasing on daily basis your credit bureau report is the first stop to check if some is trying to get money using your information. It’s always easier to prevent than repair after the damage is already done.

  5. As Sam Li states, it is definitely worth it to check on your credit report as often as you can. In the U.S., you may get a free credit report from each of the reporting agencies once per calendar year. I would suggest getting a report from one of the three every four months on a rotating basis so that you can actively monitor your credit history.

    See the information here: http://www.annualcreditreport.com

    Do not go to those places like “freecreditreport.com” and others like you see on TV. Those are pay sites and not affiliated with the government-run site that is free.

    If you want to get your credit report more often than what the U.S. law allows, then you will have to pay for it. Credit scores are not free either. If you are shopping around, it definitely helps to know your credit score and I personally have used http://www.myfico.com as it is the only one run by the company that created FICO. With online coupons, you can get all three reports and scores for about $20 or a little more. Their site is also good at putting into plain words what items on your report mean and what your debt ratio does to your credit score. This isn’t a plug, just my experience.

    There is a slightly more economical way to get your credit scores when shopping around. Ask the person who ran your credit to tell you what they got when they ran it. Using this method is just an estimate. Keep in mind though that different companies use different scoring agencies and methods AND that getting your credit checked (unless by a credit bureau or MyFICO.com) will show up on your credit report and drop your score a bit.

  6. Remember that if your credit is checked and an adverse item shows up, you are entitled to a free credit report from the company showing the adverse item. You need to follow the directions on the note you receive, especially the time limit, and usually the process of correcting it can be started online, with paperwork followups if necessary.

  7. When corresponding with the credit bureaus, it is important to use certified mail with a return receipt. This gives you the true start of when the 30 days begins.

  8. My application was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review.

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