UPDATED: April 21, 2022
Not to be confused with your numerical credit score, your credit report contains the detailed personal and credit information used to generate your score. It’s reviewed by potential employers and lenders to get an idea of your financial position and ability to manage debt effectively. But like most data sources, credit reports aren’t always free from errors. If identified and handled quickly, these errors can be taken care of before they cause issues. Here’s how to fix an error on your credit report.
Table of Contents
The Information in Your Credit Report
Before you can understand the importance of accuracy in your credit report, it’s helpful to know what it consists of. Instead of a simple numerical value, your report is chock full of essential data like credit inquiries and history, account details, and personal information like your date of birth and previous addresses.
If any of the data is wrong, or if someone else is fraudulently creating entries on your report, it could have devastating effects on your job prospects, eligibility for credit, and your identity.
A credit report contains a few main sections:
This section houses your date of birth, social security number, addresses, and employment history. Inaccuracies here tend to be limited but can crop up if family members share similar names.
Credit Account Information
Think of this section as a running list of all open lines of credit, including auto loans, student loans, credit cards, etc. This section not only tracks the amounts paid on each account monthly but shows a rating from creditors based on if your account status is okay or past due.
Promotional Inquiries and Account Reviews
This is a list of all companies who have done a soft credit check to send you an offer for credit or have checked your report as part of a regular account review. These inquiries are for your eyes only and have no negative impact on your credit score.
Hard Credit Inquiries
If you’ve been shopping around for credit in the past few years, any credit checks the lenders make will be logged in this section as hard inquiries. Hard inquiries are the ones that can be damaging to your credit score if you have too many. Hard inquires are a natural part of personal finance, but having a bunch of them over a short period of time can make lenders think you may be in financial distress and trying to get access to a lot of money.
Checking Your Credit Report
Since your credit report is referenced every time you apply for a new loan, it’s a big deal to make sure it’s as accurate as possible. To ensure accuracy and get issues resolved timely, the general recommendation is to check your credit report yearly.
You are legally entitled to receive a free credit report from each of the major credit reporting companies, Experian, Equifax, and TransUnion, once every 12 months. It’s up to you whether you want to get all three at once or spread them out.
Whichever you decide, you’ll only need to go to one website created by the three credit bureaus to streamline the process.
Identifying Errors on Your Credit Report
When you’re reviewing your credit report, it’s essential to know what to look for to diagnose an error. You’ll want to check for:
- Inaccurate personal information – Look for invalid names, phone numbers, or addresses that could indicate someone else has used your credit.
- Accounts you never opened – Your credit report lists all of your open accounts, including current balance. An immediate red flag should go up if a company is listed that you’ve never heard of or don’t currently have a relationship with.
- Late/delinquent payments – If you know you’ve paid all of your balances in full and on time, check for any instances where a creditor may incorrectly have marked your balance as late. Since late payments can also impact your credit score, you’ll want to make sure the information is accurate.
- Hard inquiries you don’t recognize – Lenders can make either hard or soft credit inquiries in the process of deciding to loan you money or determine your creditworthiness. Any unrecognized hard inquiries could spell fraudulent activity or identity theft, so be sure to flag these and follow up to understand the details.
Steps to Correct Errors
Identifying the error is half the battle. Once you’re armed with the incorrect details, follow the steps below to make sure your dispute is handled appropriately.
Contact the Credit Bureau
First, you’ll need to reach out to the credit bureau where you identified the error and make a formal report. You’ll want to let them know what you’re disputing, why it’s inaccurate, and that you request the incorrect information be removed.
The preferred method of submitting disputes has previously been to do so in writing. The Federal Trade Commission recommends to write in and keep copies of the complaint and the return receipt from the mail for your records.
As the credit bureaus have gotten more tech-savvy, many disputes can now be started or handled entirely online. Depending on which credit bureau you’re starting a dispute with, you’ll want to check available resources and get clear on the best path forward before you begin.
Bonus: Most credit bureaus link to articles on how to start a dispute directly from the credit report. That saves you the legwork of figuring out the best path forward for each bureau.
Contact the Lender
Once the credit bureau has been notified, you’ll want to contact the lender in writing and make them aware of your same dispute. Be sure to cover the exact details as you did with the credit bureau (what you’re disputing, why it’s inaccurate, and what you want done). Again, it’s important to keep copies for your records if you submit them by mail.
Once the lender has done a review and corrected any misinformation, they should send the correct details up the chain to the reporting bureaus. Be sure to follow up as you may need to take it upon yourself to make sure everyone ends up with the correct information.
Checking your credit report and disputing errors is a simple thing you can do to make sure your financial reputation remains positive. Failure to keep tabs on your report could mean dealing with an avoidable headache down the line.