Credit Report Disputes

Credit bureaus, lenders, creditor and financial institutions make mistakes every year. In fact, a study released by the US PIRG (Public Interest Research Group) in June 2004 states that “up to 79% of the consumer credit reports surveyed contained some kind of error or mistake“.

These credit reporting errors can cost you points on your credit score, meaning hundreds or even thousands of dollars in monthly payments and inflated interest rates.

That is why financial advisors everywhere highly recommend that you pull and review your credit report regularly, and dispute any inaccurate, incomplete or outdated information on it.

The faster you identify these errors and dispute your credit report, the better. Even small credit report errors can cost you hundreds or even thousands of dollars – in elevated interest rates over the long run.

The affect credit report disputes have on your credit score
A consumer reporting agency must correct or, as the case may be, delete from your credit report the information that is found to be inaccurate or can no longer be verified.

However, FICO scores (as almost all other credit scores) only consider credit related information that’s on your credit report. If the information you’re disputing is personal (e.g. SSN, address, date of birth, employers etc.) your FICO score will probably remain the same. FICO scores only consider credit account, collection, and public record information.

Correcting credit report errors typically results in credit scores going up by 20 – 30 points, but corrections can lead to a score increase of up to 100 points or more if the error was a bankruptcy report.

If you have removed unauthorized credit inquiries from your credit report – they may or may not affect your FICO score if they are older than 1 year (FICO only considers hard inquiries from the last 12 months)

Also, keep in mind that removing negative information from your credit report may not have the impact on your FICO score that you expect. There could be other negative information on your credit report that prevents an immediate increase of your FICO score.

So should you bother?
It is important to note that even if your credit score does not improve – creditors, lenders, landlords and even potential employers review your credit report and not just your FICO score.

Removing negative items from your credit report may still make a big difference and improve your financial status – even if your credit score remains the same.

Here are Credit Report Disputes main topics:

Credit Reporting Errors – A short discussion on what are the common credit report errors and how they are made.

How to Dispute Your Credit Report (Part 1) – A step-by-step guide for disputing credit report, and a summary of your credit dispute rights under the FACT Act.

How to Dispute Credit Report (Part 2) – A guide for your next steps after receiving the credit bureau’s Dispute Results Letter, and a summary of your rights in case that the your dispute is accepted or rejected.

Sample Credit Report Dispute Form – Use this sample credit report dispute letter to initiate an investigation with the credit bureaus.

Equifax Credit Report Dispute – Information, links & tips for initiating an investigation with Equifax.

Experian Credit Report Dispute – Information, links & tips for initiating an investigation with Experian.

Trans Union Credit Report Dispute – Information, links & tips for initiating an investigation with TransUnion.