A study carried out by the U.S. Federal Trade Commission during the last decade pointed out that around 20% of all consumers had at least one inaccuracy in their three major credit reports. It also highlighted that 5% had errors that could lead to them paying more for insurance and loans. These numbers go to show the importance of identifying and disputing any errors you might find on your credit report.
Why Should You Review Your Credit Reports?
The information your credit reports hold have an effect on your ability to get a loan as well as on how much you end up paying through the course of a loan. As a result, when you plan to apply for an auto loan, a home loan, or insurance, it is important to determine if the information your credit reports hold is accurate and up-to-date.
Reviewing your credit reports from time to time may offer protection against identity theft as well. This is because you would then be able to identify loans that identity thieves might have taken by using your personal information.
Common Errors in Credit Reports
Errors in credit reports come in different forms. Some of the common ones include:
- Inaccurate personal information (spelling of name, phone number, or address)
- Name of the creditor.
- Inaccurate reporting of accounts as delinquent or open
- Errors related to credit limits and account balances
- Merging of information with someone else’s credit history
Disputing Errors in Your Credit Report
If you wish to dispute an error or more in your credit report, you typically need to follow a two-step process.
Contact the credit bureau. Upon spotting any error in your credit report, contact the credit reporting agency in question as soon as possible. You need to explain the situation in writing, while also sending copies of documents that support your case.
The letter you send should contain information about every error including corresponding account numbers as well as your latest contact details. You also need to request that the agency removes or corrects the inaccurate information.
Sending your letter via certified mail and asking for a return receipt is always a good idea as you then have a record of exactly when the letter was dispatched and received. If you are unsure about how to write a letter to dispute errors in your credit report, you may use the template provided by the Federal Trade Commission.
Contact the information provider. This requires contacting the company, or the furnisher, that is responsible for providing inaccurate information to a credit bureau. It could be your bank, a mortgage provider, or even a utility company.
In some cases, contacting the furnisher of the information directly might help save some time. This is because while a credit bureau simply notifies a furnisher about your dispute, the responsibility of resolving it rests with the company in question.
If your credit report mentions the furnisher’s address, use the same to send your dispute letter. Alternatively, contact the furnisher over the phone and ask for its mailing address.
Do You Have to Send a Dispute Letter Via Regular Mail?
The Consumer Financial Protection Bureau suggests that you send you dispute letters to credit reporting agencies via certified mail with return receipts. However, the top three credit reporting agencies in the country now give consumers the ability to initiate disputes online. These include:
If you wish to send dispute letters via certified mail, here are the addresses to use.
Consumer Dispute Center
PO Box 2000
Chester, PA 19016
PO Box 740256
Atlanta, GA 30374-0256
PO Box 4500
Allen, TX 75013
If you’re unsure about how to go through with the process, or if you have further questions about disputing errors on your credit reports, consider seeking assistance from a professional. A trained eye, after all, can help save time and money, especially if you plan to apply for a loan in the near future.