Fixing Errors on Your Credit Report (By Yourself, For Free)

Checking your credit score regularly is essential for maintaining a healthy credit score. But what happens when you see a sudden, unexplained drop in your score? To the best of your knowledge, you haven’t missed a payment, made any late payments, maxed out a credit card or had an account go to collections. So what gives?

The first step in resolving this issue is to order a copy of your free credit report and review it to determine what happened.

Maybe you’ll find that you did miss a payment or exceed the recommended credit utilization ratio. But if you notice errors on your credit report, you’ll want to fix them quickly. (Make sure you know how to read your credit report.)

The good news is, you don’t need to use expensive (and potentially predatory) credit repair companies. Fixing errors on your credit report is something you can do – for free – on your own. And you should do it to improve your credit.

Common credit report errors

When you pull your credit report, what sort of inaccuracies should you look for? According to the CFPB, common errors in credit reports typically fall into four categories:

1 - Identity errors

• Errors made to your identifying information, such as a wrong name, phone number or address
• Accounts that belong to someone with the same or a similar name as you
• Incorrect amounts resulting from identity theft

2 - Incorrect reporting of account status

• Closed accounts that are reported as open accounts
• Naming you the owner of an account when you're just an authorized user
• Accounts incorrectly reported as late or delinquent
• Inacurrate date of last payment, date opened, or date of first delinquency
• Same debt listed more than once, possibly with different names

3 - Data management errors

• Reinsertion of incorrect information after it was corrected
• Accounts that appear multiple times with different creditors listed, especially in the case of delinquent account or accounts in collections

4 - Balance errors

• Accounts with an incorrect current balance
• Accounts with an incorrect credit limit

Some of these errors may have a negligible effect on your credit score, but others could have a significant impact.

In a 2012 study, the FTC found that one in five consumers had an error on at least one of their three credit reports and 5% of consumers had errors that could lead to them paying more for products such as auto loans and insurance.

There’s another potential error that doesn’t appear on the CFPB’s list: a credit report that mistakenly reports a consumer as being deceased. This occasionally happens when a spouse or cosigner on a credit card dies, and a creditor reports that your account is associated with a deceased individual.

It can also occur when you accidentally wind up on the Social Security Administration’s Master Death File. According to a story from CNBC, this mistake affects about 6,000 people per year and can lead to being rejected for a loan, a revocation of student loans and other credit problems.

How to dispute an error on your credit report

Once you review your credit report and find a mistake, you’ll need to contact the credit bureau that issued the report to request a correction. Although you can initiate a dispute via mail or by phone, the fastest way to file a dispute is online at TransUnion, Experian and Equifax.

Whether you dispute the item by phone, by mail or online, you’ll need to provide each item you believe to be inaccurate, including the account number, creditor and the reason you believe the information is incorrect. When you file a dispute online or by mail, you can also attach documents supporting your argument. This might include items such as:

• A copy of the police report or FTC Identity Theft report showing that an account was the result of identity theft
• Bankruptcy paperwork showing an account was included in or discharged in bankruptcy
• Letters from creditors showing how an account should be corrected
• Student loan disability letters showing that a student loan has been discharged due to disability
• Deferment or forbearance documents
• Canceled checks showing that a collection account was paid off

If you prefer to file a dispute by mail, you can also find mailing addresses for the three major credit bureaus at the links above and the CFPB has a sample credit report dispute letter. Be sure to send your letter via certified mail, return receipt requested, to document that the credit bureau received your letter. Also, make sure you keep copies of your correspondence and any supporting documents you send.

You may also want to write to the creditor who provided the incorrect information to the credit rating agency to let them know you are disputing the information they provided. While your credit dispute is being investigated, you can continue to use your credit cards and apply for new credit. An open dispute won’t block access to your credit file.

If your credit report erroneously indicates you are deceased, you’ll need to contact the Social Security Administration (SSA) to correct their records and get a letter from the SSA confirming the correction. This letter can be submitted online or via mail to the credit reporting agencies.

If the problem stemmed from a creditor rather than the SSA, you’ll need to send a notarized letter to the credit reporting agencies affirming your identity. This letter must include your full name, current address, Social Security number, date of birth and a statement that you are not deceased. You may also need to include a copy of your government-issued identification, such as a driver’s license or military ID card.

How long does it take to fix errors on a credit report?

Once you submit your dispute, the Fair Credit Reporting Act (FCRA) allows the credit bureau 30 days to complete the dispute process. The agency will forward your dispute to the creditor and, ideally, the creditor will verify that the agency should remove the error from your report.

Once the creditor responds (or at the end of the 30-day window if the creditor doesn’t respond), the credit bureau will notify you of the results of the dispute. In the meantime, if you filed your dispute online, you can log in to the credit bureau’s website to check on the status of your claim.

If a change is made to your credit report, the credit rating agency will also notify the other two major credit bureaus so any inaccurate information can be updated on those reports as well. If all goes well, you should see an improvement to your score right away.

That’s the ideal scenario. However, things don’t always work out so well. If there is a lot of back and forth between you, the credit bureau and your creditor, the process can take 90 days or more.

In a follow-up study to their 2012 report, the FTC revisited 121 consumers who had filed disputes with credit reporting agencies that were unresolved at the end of their initial study. One year later, the study found that:

• Nearly 70% of those consumers believed that at least one piece of disputed information was still inaccurate on their credit report.
• 40% stated they did not receive a notification from the credit reporting agency that the disputed item was not changed.
• Over half of consumers who were notified said the credit reporting agency didn’t explain the lack of modification.

Also, among consumers who did receive a modification of their credit report during the original study, 1% had previously-removed negative information reappear on their credit report. So it’s a good idea to stay on top of any disputes you file to ensure that negative items do get removed from your report, then continue to monitor your credit to ensure those negative items don’t make another appearance.

Can I fix my credit faster by using a credit repair company?

Of course, reviewing your credit report, filing disputes and following up to ensure the errors on your credit report are removed and don’t make a reappearance takes time. If you’re short on time and want to move the needle on your credit score quickly, maybe you’re considering hiring a credit repair company to do the grunt work for you.

If you really can’t take the time to handle disputes on your own, hiring a legitimate credit repair service may have value. Just keep in mind that a credit repair company can’t do anything that you can’t do for yourself, for free. They can’t have accurate negative information removed, so if your score suffers because of legitimate financial missteps, those can only be erased by time and good credit practices, such as paying your bills on time and keeping your credit utilization rate low.

Unfortunately credit repair scams are common, and it can be difficult to tell legitimate credit counselors from the scammers. If you do decide that hiring someone to handle credit disputes is a good use of your money, the FTC recommends steering clear of credit repair companies that:

• Insist you pay them before they do any work on your behalf
• Tell you not to contact the credit reporting agencies directly
• Tell you to dispute accurate information on your credit report
• Tell you to provide false information on applications for credit or loans
• Don’t explain your legal rights when they tell you what they can do for you
• Promise a “new credit identity” or a fresh start for your credit history

Bottom line

There’s no fee for filing a dispute, and your credit score won’t go down simply because you started a dispute – even if the negative information on your credit score turns out to be accurate.

So while fixing errors on your credit report might seem like a hassle, if your credit score is suffering due to errors in your file, disputes are a risk-free way to raise your score.

Your credit score impacts so many areas of your life, from the amount you’ll pay for auto insurance to being able to afford the home you want, the interest rates you’ll pay for a mortgage or auto loan, and sometimes even landing your dream job. If you’re proactive about reviewing your credit report, you can catch errors and dispute them before they turn ugly.

About the author

Janet Berry-Johnson is a Certified Public Accountant and personal finance writer. Her work has appeared in numerous publications, including CreditKarma and Forbes.