It’s good to get into the habit of pulling and checking your credit report at least once per year. Why? Because according to a study by the Federal Trade Commission (FTC), it’s estimated that up to a quarter of all American consumers have some sort of error on their credit report. While you may not think this is significant, keep in mind that even a seemingly small error on your credit report can have far-reaching consequences, like a lower overall credit score which in turn could mean paying more interest on financed purchases.
The bottom line is that if you have an error on your credit report, it behooves you to dispute the item as quickly as possible to seek a correction. And being that surveys indicate that up to 70 percent of consumers that disputed items on their credit report believe the issue wasn’t fully resolved, it also behooves you to get the dispute process down so you know what to do. This post will take a closer look at how to manage the dispute process. Here’s a look:
1: Pull Your Credit Report
Credit reports aren’t taboo items any longer. In fact, it’s easier than ever to pull them from a variety of independent credit reporting sites as well as the three major credit bureaus. Noting this, you really don’t have a good excuse to not be pulling them and checking them at least once a year. After you pull your credit report, closely look it over. If something looks fishy, make sure you have a legitimate claim before you contact the three credit reporting bureaus to dispute it.
2: Get Proof
If there’s a legitimate issue you’re disputing, make sure that you have proof on your side. Gather any documentation that supports your claim that you can share with the three credit reporting bureaus when you go to fight the item.
3: Dispute The Issue
There’s a reason why we caution you to ensure it’s a legit item you’re disputing and to have documentation on your side. It’s because the dispute process can be very tedious, especially considering that you have to dispute the issue with each of the three major credit reporting bureaus (Experian, Equifax and TransUnion). While you can contact each credit reporting bureau by phone, we always suggest doing it by mail or online, simply because you have a paper trail of your dispute when you do so. (If you dispute the issue by mail, we strongly advise that you do so with a return receipt request so you can prove that the bureau received your complaint.) You’ll be asked to fill out and file a Dispute Form with each of the bureaus, where you identify the erroneous item and explain the situation. After you file the form, the credit bureau will review and provide a response to your dispute, generally within about a month. The bureau will either agree with you and change your credit report or disagree with you or deem your claim too minor to investigate.
4: Follow Up
If your dispute was either denied or deemed too minor to investigate, you can still pursue a correction via written statement of dispute that can be included in your credit report. This will ensure that anyone who receives a copy of your credit report will also be able to see this written statement, which can certainly come in handy if the item is a significant one. The other option is to file a complaint with the FTC or Consumer Financial Protection Bureau (CFPB) if you believe the bureau didn’t reasonably act when acting on your dispute.
It’s a new year, so we’d suggest making one of your New Year’s resolutions dedicating yourself to getting in better financial health. One of the big keys in doing so is making sure your credit score is in good shape, and checking your credit report to ensure its accuracy at least once a year is a great habit to get into. You might just be among the quarter of Americans that find a mistake on it. If you do, now you know how to act to dispute it.
