How to Dispute Errors on Your Credit Report

A 2012 Federal Trade Commission study found that one in five consumers had an error on at least one of their three credit reports, and about one in 20 had an error that could lead to less favorable loan terms. Disputing errors is your legal right under the Fair Credit Reporting Act, and the process is straightforward if you follow it correctly. You can check all three reports for free every week at AnnualCreditReport.com.

Not everything you dislike on your credit report is an error. A late payment you actually made is accurate, even if it hurts your score. Errors worth disputing include: accounts you do not recognize (possible identity theft or mixed file), incorrect balances or credit limits, late payments reported for months you paid on time, accounts incorrectly showing as open when you closed them, duplicate accounts, and incorrect personal information. Go through each trade line carefully and compare it against your own records — bank statements, payment confirmations, and account statements. Flag anything that does not match the facts.

Before you file a dispute, collect documentation that shows the information is wrong. If you are disputing a late payment, find the bank statement or payment confirmation showing you paid on time. If you are disputing an account you do not recognize, say clearly that it is not yours; the bureau must check with the creditor, and information that cannot be verified must be removed. If the account came from identity theft, file a report at IdentityTheft.gov, which gives you the right to have the bureaus block that information. For incorrect balances, a recent account statement showing the correct balance works. Make copies of everything. Never send originals. The stronger your documentation, the more likely the bureau will rule in your favor rather than simply accepting the creditor's response.

You can dispute online through each bureau's website (Equifax, Experian, TransUnion), by phone, or by mail. Many people prefer disputing by certified mail with return receipt requested because it creates a clear paper trail and proof of when the bureau received your dispute. In your letter, clearly identify each item you are disputing, explain why it is inaccurate, and state what the correct information should be. Include your full name, address, Social Security number, and date of birth. Attach copies of your supporting documents. Send a separate dispute to each bureau that shows the error — the bureaus do not pass your dispute along to each other. You can also dispute directly with the company that reported the information.

Under the Fair Credit Reporting Act, bureaus generally have 30 days to investigate your dispute (45 days if you send additional information during that period). The bureau forwards your dispute to the creditor, which must investigate and report back. If the information cannot be verified, the bureau must remove or correct it, and a creditor that finds its own reporting wrong must correct it with every bureau it reported to. You will receive written results of the investigation. If the dispute results in a change, you are entitled to a free updated copy of your credit report. If the dispute is denied and you believe the information is still wrong, you can add a brief statement of dispute to your file, dispute directly with the creditor, or file a complaint with the Consumer Financial Protection Bureau (CFPB). If you are already applying for a mortgage, tell your loan officer before you dispute anything — an open dispute can add steps in underwriting, so it is usually better to resolve errors before you apply.

• ✓A 2012 FTC study found one in five consumers had an error on at least one credit report — review yours line by line against your own records
• ✓Dispute by certified mail for a clear paper trail, and file a separate dispute with each bureau that shows the error
• ✓Bureaus generally have 30 days to investigate and must remove items that cannot be verified
• ✓If you are mid-mortgage, talk to your loan officer before disputing — an open dispute can add steps in underwriting