Errors or fraud: How do I remove derogatory items on my credit report?
In this article:
If you find errors or fraud on your credit report, here’s what you need to do:
- Contact all three main credit reporting agencies (CRAs) using this letter from the Consumer Financial Protection Bureau.
- Contact the company the reported the derogatory information and request that they correct it.
- Report identity theft at IdentityTheft.gov. In addition to reporting fraud to the CRAs and original creditors.
Self-defense: Check your credit report regularly
Credit reporting agencies (CRAs) must investigate and correct errors when notified. It’s important to check your credit report regularly. This is especially true if you’re preparing to apply for a mortgage loan. Your credit report offers a summary of your credit history and activity. But you may ask yourself: What if I find errors or fraud on my credit report?
The good news is that you can dispute these problems and get them fixed. The bad news is that this process can take a few weeks when you work through normal channels.
Don’t wait too long to review your credit report. Review it carefully long before you plan to apply for a mortgage. And know what to do if you spot any red flags. Be a proactive consumer. It could help you land a better loan at a better rate.
What if you already have a mortgage in process?
Your lender may be able to help you correct your credit history within a few days. Only your lender has access to “rapid re-score” companies. It’s not something you can do on your own. But they can fix problems with your credit report very quickly as long as you can prove the items are wrong or fraudulent.
How to check your credit report
By law, you are entitled to a free copy of your credit report once a year. Actually, you can access three different credit reports from the three major credit reporting agencies (CRAs): Experian, Equifax and TransUnion. They will likely all list the same information. You can get all three reports for no charge at annualcreditreport.com.
It’s best to download or print each credit report. That way you can review each line and item carefully.
Look for errors, fraud, and inaccurate or incomplete info on each report. The Consumer Financial Protection Bureau (CFPB) lists the following errors to watch for:
- Wrong name, phone number or address
- Accounts belonging to another person with the same or a similar name
- Incorrect accounts due to identity theft
- Incorrect reporting of account status
- Closed accounts reported as open
- Accounts incorrectly reported as late or delinquent
- Incorrect date of last payment, date opened, or date of first delinquency
- The same debt listed more than once
- Data management errors
- Reinsertion of incorrect info after it was corrected
- Accounts appearing multiple times with different creditors listed
- Accounts with an incorrect current balance or credit limit
“Look for inquiries from companies you don’t recognize,” suggests Gerri Detweiler, author of “Debt Collection Answers.” “And changes in personal information should be immediate red flags that someone could be stealing your identity.”
How to correct these errors
There are two main steps involved in fixing these issues.
First, contest the errors with each of the CRAs by visiting Equifax, Experian, and TransUnion (using these special links). Each will guide you through the process online. Or, you can dispute the matter with the CRAs via a mailed letter like this example from the CFPB.
Either option involves explaining in writing what you think is wrong and why. Prepare to include copies of evidence proving your claim. Remember to keep copies of your dispute letter and supporting documents.
Second, dispute the error with the original creditor that provided the info to Equifax, Experian and TransUnion. Here, it’s best to create a dispute letter and snail mail it along with any supporting documents, such as this example from the Federal Trade Commission. You can find the provider’s address on your credit report or contact them and request it.
Why this is all worth it
“Fixing errors can really help improve your credit score. And that can help you secure a better mortgage loan at a lower rate,” says Megan Gorman with Chequers Financial Management. “Remember that it’s important to provide supporting documentation. And don’t be frivolous in contesting items.”
Detweiler says it’s not just negative info that can hurt your ability to get a loan.
“Positive or neutral information that’s incomplete or incorrect can also impact it,” Detweiler says. She’s seen consumer credit scores rise by up to 100 points after getting credit report errors corrected.
What happens next
The CRAs you contact must investigate your dispute within 30 days of receiving it. They have 45 days if you disputed the error after accessing annualcreditreport.com. They also must get back to you with results unless they think your claim lacks merit.
The CRA may fix the error alone if it has enough info to do so. Or it may ask the source that provided the info to investigate your dispute. The law requires that source to delete or change your contested info if it is wrong or can’t be verified. The source must also notify all the CRAs so they can update their files, too.
Within five days after their investigation finishes, the CRA must send you its results. If your credit report was corrected, you’ll get a free updated credit report.
What can you do if your dispute is not resolved? Try these tips:
- Try the same dispute process all over again with better supporting information.
- Ask the CRAs to add a brief statement of the dispute to your credit reports and include or summarize this in future reports.
- File a complaint with the CFPB.
- File a complaint with the FTC.
- Get legal help. “Talk with a consumer law attorney with experience in credit damage cases,” says Detweiler.
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