How to Dispute an Item on Your Credit Report

Credit reporting agencies and the businesses that report to them are responsible for maintaining accurate records. Unfortunately, the burden of proof still primarily falls on you, the consumer. The United States Federal Trade Commission (FTC) recommends checking your credit report on a regular basis to spot and report errors.

Reporting Credit Report Errors to the Credit Bureaus

Conventionally, snail-mailing a credit reporting agency was the first step in removing a disputed item from your credit report. It is still fairly common today. The letter should be concise and professional; ideally, it’s about three paragraphs long and covers half a page or less. Open with a statement on why you’re writing to them, proceed to tell them what’s wrong, and then close by listing the documents you’ve included as proof.

The major credit reporting companies, such as TransUnion, Equifax, and Experian, have an online system for disputing inaccuracies, but the dispute process isn’t much different. It’s usually a little faster than snail-mail though.

Documents of proof may include receipts, copies of checks, correspondence with the business declaring a bill paid, or anything else that proves the inaccuracy of your credit report. These documents should only be copies of the originals, in case the letter gets lost in the mail, or the credit reporting company misplaces it.

Internal Investigation of the Dispute Item

The agency will then look into the matter and forward your complaint, with proof, to the business who submitted the report. An investigation is then launched to determine the accuracy of the information. If the business fails to sufficiently debunk your claim of inaccuracy, the credit reporting agency adjusts or removes the item, then offers you a free credit report. They also prevent the business from reporting the same item again, unless additional proof is provided.

If the business does debunk your claim, the item remains. Either way, you should receive a letter containing the results of the investigation within about 30 days.

Note: Successfully removing an item from one credit report should eventually affect all credit reports, no matter what company the information is retrieved from.

What if the Disputed Item Fails?

If your dispute is decided against you, it should naturally fall off your credit report in seven years. The exception is bankruptcies, which last for one decade.

Businesses can wait as long as they’d like before reporting a negative item. Therefore, a dispute over an item that was reported months or years after that fact will likely be decided in the business’s favor, unless you have other arguments against its accuracy. In general, though, the item is still removed from the report seven to 10 years after the event took place, not seven to 10 years after the report.

Final Thoughts on Disputing Credit Report Items

Everyone is entitled to at least one free credit report per national credit reporting company, per year. If an error is found, tell the company in writing, not by phone. This way, you have proof of correspondence in case the company doesn’t reply. Here is a sample letter you can use to help you get started.

Never let an error slide because it’s small or you don’t have enough time. Every negative error hurts your credit score, which in turn makes it harder to be accepted for car loans, mortgages, or new credit cards. In addition, some places of employment check a potential employee’s credit report before hiring him or her, just to determine that person’s financial responsibility.