How to Fix Errors in Your Credit Report
A few years ago, there was a study done showing that 80% of credit reports have some sort of error in them.
While most of the mistakes are usually harmless, about a quarter of them were serious enough to trigger credit denials.
Many errors can end up costing you several hundred or even several thousand dollars in extra financing costs due to a lower credit score.
The good news - there's an easy way to fix these errors thanks to the Fair Credit Reporting Act.
Under the FCRA, credit reporting agencies have a legal requirement to fix or confirm any errors within 30 days.
When you file a dispute, the credit bureaus must initiate the investigation by contacting the creditor listed in the report. If the creditor agrees the information was inaccurate or they could not verify it, they are required to notify all 3 major credit bureaus so the error can be fixed or deleted.
Here are the steps you need to take to fix credit report errors:
Step 1. Get a Free Copy of Your Credit Report
In order to dispute an error in your credit report, you need a copy that is less than 90 days old. You are entitled to a free credit report from each of the 3 major credit bureaus once every 12 months.
You can get yours at AnnualCreditReport.com.
Step 2. Review for Errors
Here is a list of errors you should look for and fix.
- Negative Info Over 7 Years Old
The first thing you want to look for is any negative information such as late payments that are over 7 years old. The only exception is for Chapter 7 bankruptcies - which can stay on your record for up to 10 years. These out-dated errors should be removed immediately.
- Hard Inquires
There are two types of credit inquiries, hard and soft. A hard inquiry is when you apply for a loan or credit card and you authorize the lender to view your credit history, whereas a soft inquiry is one that you did not initiate.
Hard inquiries is what you want to pay attention to because they affect your credit score. Look for any inquiries that you do not recognize. Remember - a hard inquiry is one that you initiated so you should remember if you applied for credit or a loan.
If you have information under the collections section, look for accounts you don't recognize. Also look for accounts that have been paid but are still listed as open collections.
- Public Records
These are any bankruptcies, liens, garnishments or any other judgments against you. Pay close attention to this one because any errors in this section will severely affect your credit score.
File a Dispute
Assuming you found errors in your credit report, you need to file a dispute with the credit bureaus.
The easiest way to do this is via their online dispute forms:
That's pretty much all there is to it. Make sure you fix any errors as soon as possible.
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