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How to Report and Repair Credit Report Errors

July 6th, 2011 at 12:00 pm

Having a good credit rating is important. If you're in the market for a new home or a new car you want to be able to get a low-interest loan quickly, without a lot of fanfare or turmoil. A good credit score can make that happen. But what if your latest credit report says you have had some difficulties making your payments on time, and you know that's not true? How do you go about fixing it? Following are a few tips on how to report and repair credit report errors.

Disputing an Error

If you believe your credit report contains an error, or more than one, you can try and have it removed so your credit score will go up. The first step is to let the credit reporting agency know you want to dispute their report. There are three major credit reporting bureaus. They are Equifax, Experian, and TransUnion. Although each agency calculates your credit history a bit differently, they all use the same basic formula to reach their conclusion and assign you a credit score. The information they base their findings on is submitted by lending institutions throughout the country. This information is complied, formulated statistics are applied, and then your credit score is assigned. You are entitled to get a copy of your credit report, and if you feel an error has been made you have the right to dispute the score.

Reporting the Error

In order to dispute a portion of your credit report, it is your obligation to inform the credit reporting agency of your claim. You must submit your dispute in writing, and the claim must be detailed and provide documentation to back up your claim. Make sure you submit copies of the documents and not the originals. Hang on to the originals for your own security. If you are claiming that there are multiple errors, you must submit similar documentation for each claim. You don't have to make two separate claims, simply submit one claim and clearly define each item you wish to dispute, along with the documentation to support your point of view. In your letter you must explain clearly and concisely the matters you believe to be in error, and why you think they are wrong. You should send the package containing your letter and documents to the credit reporting agency by certified mail, with a return receipt requested. This will provide documentation that the claim was filed. Make a copy of the letter you send, along with copies of the documents and the returned mail receipt, and keep them in your files for future reference.

Inform the Creditor

The second step in the process of disputing an item in a credit report is to inform the creditor who supplied the information to the credit reporting agency of the fact that you disagree with their assessment and want it removed. You must do this in writing, the same as you did with the credit reporting agency. Your letter should be similar to the previous one, and you should also provide documentation to back up your claim. This letter should be sent to the creditor by certified mail, return receipt requested, the same as you did with the package you sent to the credit reporting agency. You should make copies of everything you send to them, and keep those copies on record.

Repairing Your Credit Score

The whole idea behind disputing an item in your credit report is that the item in question is keeping your credit score lower than it should be, and as a result your loan, if it is approved, will carry a significantly higher interest rate. Knowing that a higher credit score will entitle you to a lower interest rate, it is a good idea to study your credit report carefully. If you see something that you believe to be in error, and report it, you credit score will improve if your claim is upheld. If that happens the creditor cannot report that item again.

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