Jerry Powell of Castle Rock, Colorado knows just how devastating an error on your credit report can be. At first, he couldn’t understand why he’d been turned down for the loan he needed to help him launch his new company, Takeaway Tables. It turns out the credit reporting agencies had mistakenly listed him as dead. Jerry is working to resolve the issue, but when he discovered it, he immediately thought, “My entire world is about to crumble around me.”
The last thing anyone wants to see is an error on their credit report and, while most errors are not as extreme as Jerry’s, they can still hurt your credit score. Jerry recommends everyone checks their credit report for errors before they can cause problems. According to Denver-based attorney Eric Nesbitt, if you see an error, you should address it as soon as possible. “You don’t want to wait too long,” he said.
The first way to avoid this kind of situation is simple: regularly check your credit reports. Make sure you head over to annualcreditreport.com—where you can get one free report per year for each of the credit-reporting agencies (Equifax, Experian, and TransUnion). Rather than check all three at time same time, it can be a good idea to look at one report every few months to help you catch issues as they arise.
It may also be worth signing up for a service such as CreditKarma.com or CreditSesame.com, which allows you to keep track of your credit score for free. While these services don’t offer as much detail as your actual credit reports, they are useful for monitoring purposes and can alert you to any significant changes that may have occurred.
If you see something on your report you don’t recognize, investigate carefully to make sure it really is an error before taking action. For example, if you see a late payment reported on your account, but you don’t recognize the name of the creditor, it may still be a legitimate debt. Perhaps that store card you opened last year is managed by a third party, or maybe a delinquent debt has been sold to a debt collector.
Once you have verified there really is an error on your report, you should reach out to the relevant credit-reporting bureau or bureaus. Make sure you have as much information as possible to verify the error. Also, gather supporting documentation if possible. A police report may be important if the errors on your report are related to financial fraud.
You can file a dispute with the credit reporting agency by phone, by mail, or online. While each method has its advantages, Rod Griffin, Experian’s director of public education, feels filing online is often the best approach. "Today, the easiest, fastest, and safest way to dispute information is online. It's through a secured and encrypted system, and the process begins immediately." A combination of approaches may be useful. For example, speaking with a representative may help you gather more information before filing your dispute online or via mail.
According to the Federal Trade Commission, credit reporting agencies usually review disputes within 30 days. While the agency will partner with the company which initially reported the information to your report, you may wish to write to that company directly. When the issue is resolved, the agency should inform you of the result and, if there were any changes, give you a free copy of your report. There is no charge associated with any of this.
As a last resort, if you feel your complaint has not been taken seriously or there have been lengthy delays, you can complain to the Consumer Financial Protection Bureau. Often, this alone is enough to motivate a credit-reporting agency to act. Failing that, you can reach out to a lawyer, the department of consumer affairs, or even to your state’s attorney general’s office for assistance. Just know that if you’re facing a discrepancy on your credit report, contrary to what Jerry Powell initially thought, your world won’t necessarily crumble around you.
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