You’ve pulled your credit report, which shows your history of repaying debt, and it doesn’t seem right. Or you’ve been turned down for a loan and you’re not sure why. Could there be a mistake on your credit report that is dragging down your credit score? A low score may affect your ability to qualify for a loan, get a job or rent an apartment, so it’s important to catch and fix errors on your credit report. How do you do that?
Finding the Error
Go through the reports from credit reporting bureaus TransUnion and Equifax with a fine-toothed comb to see if there are mistakes, especially in these four areas where errors are common:
- Personal information: “Check that your birthday and address are correct,” says Laurie Campbell, CEO of Credit Canada Debt Solutions. Someone else’s credit information may end up on your report if you share a common name, so doublecheck the spelling of your full name and that the phone number, social insurance number and address all belong to you.
- Payment history: Check all the details of every account listed to ensure your payment history is accurate. Maybe you’ve been paying a certain bill on time but it shows you have overdue payments.
- Old information: Check the number of years the report covers. The maximum number of years taken into consideration on a report is usually around six, depending on the credit bureau. If, for example, you had an outstanding bill sent to a debt collector nine years ago or the debt was paid, but still shows on your current credit report, contact the credit bureau directly to get this old information removed from your report.
- Accounts you never opened: Check for credit inquiries, credit cards, lines of credit, loans or other accounts that you did not authorize. It may be a sign of potential fraud or identity theft.
Disputing the Error
Step 1: Gather evidence
The key to successfully disputing an error, whether through creditors or the credit bureau directly, is evidence. Gather copies of receipts, bank statements, credit card bills and other financial information that support your case. Errors relating to a change in name or address simply require verification with a marriage certificate or a piece of mail addressed to you, for example.
Step 2: Contact the creditor
When you see a mistake, your first instinct may be to contact the credit bureau. Campbell says that sometimes you can go directly to the creditor, the one you owe money to, such as a credit card company. Doing so can often resolve credit issues without an investigation by the credit bureau, so Campbell recommends taking this step first, if applicable. It may take less time for the creditor to update the credit bureaus about the error versus the credit bureau launching a full-scale investigation, which can take about three weeks.
Step 3: Contact the credit bureaus
“Contact the credit bureau, ask for the forms needed to correct the error and attach proof,” advises Campbell. “The more information you give, the better!”
Both TransUnion and Equifax indicate on their websites how to dispute credit report errors by phone, mail or online forms and what details to provide, such as the company name of the creditor related to the error and the reason for the dispute.
If you suspect fraud on a certain account, contacting the police and asking the credit bureau to put what is called a “fraud alert” on it can help show that the investigation you are asking for is legitimate.
Step 4: Add a consumer statement to your report
The ideal scenario is your dispute results in the credit bureau correcting your credit report after the creditor agrees there was an error. But what if your report is unchanged and you’re not happy with the investigation?
It’s free to add a statement, up to 100 or 200 words, to your credit report, explaining the error you've disputed and that you have documented proof to support your case.
Check your credit report regularly
Campbell advises to keep a close eye on your complete financial history. Once a year, you can obtain a free copy of your credit report by mail from TransUnion and Equifax, and online copies are also available, for a fee. By ordering a copy from TransUnion in January and one from Equifax in June, for example, you can check your credit report every six months. The sooner you see something that seems wrong, the sooner you can make it right!