How to dispute credit report error that is misleading because it’s incomplete?

[Anne]

I was checking my 3-in-1 credit report the other day. My score with Equifax & Experian is above 700, but my TransUnion score is ~640. When I checked my reports I found out that on my TransUnion report there is tax lien against me that’s reported in a misleading way, and I’m pretty much sure that it’s lowering my score.

Back in 2006 I had a federal tax lien against me, which I only found about in 2009. It turned out that the IRS thought I hadn’t been withheld in 2002, and when I had my accountant send them the W2, the $14K lien became $300 and was fully paid.

The problem is that the credit report only shows the original amount of the lien (i.e. $14K), and that it was paid. Because it was paid in 2009 I understand that it will continue to show on my report until 2016.

The way it shows on the report with the original lien – it looks like I failed to pay (until under lien) $14k, which makes me look very bad to creditors, even though it’s not so.

I’m wondering, should I send a letter to TransUnion with the IRS letter stating the lien correction and a copy of my 1099? There is no other bad information on my report, so I guess that the low score from TransUnion is a result of that lien.

Thank You

[Kimberly]

You should contact the IRS

You don’t write how the lien shows up on the Equifax & Experian report. Dose it sow as a $300, or doesn’t it show up at all.

There’s no reason to send the credit bureaus any information about your IRS lien issue. The credit bureaus are required, by law, to ensure that the information is 100% accurate AS IT IS REPORTED TO THEM.

This means that the credit bureau must insure that whatever information the IRS is sending them is properly displayed on your report. So, even if you have proof that the information is wrong, the credit bureau has to put what the IRS tells them in your report.

What you need to do is contact the IRS, and get them to straighten it out.

As to when it goes off your report, according to what I know the 7 year reporting period begins on the date the delinquency OCCURRED, not when it was paid.

[Thomas]

I would dispute it with TransUnion

Kimberley,

I think that you are wrong in everything that you say.

I would dispute the item with TransUnion, and would send them the documentation from the IRS. They are required, by law, to make sure that the information that’s on your report IS CORRECT, which is entirely different thing.

What you dispute it with them they MUST contact the IRS themselves and verify the status of your dispute with them.

I would certainly dispute it with them. Another benefit of the dispute process is that even if the dispute fails and the item remains as is – you have a right to write a 100-word statement explaining your position, and they must include it with every copy of your report until the item falls of.

As to the 7 years, derogatory items age off your credit report 7-1/2 years from the date of first deficiency (default). This is per the FCRA and nothing restarts that clock.

[Author]

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