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The 5 Most Common Credit Report Dispute Mistakes

On Behalf of | Nov 1, 2016 | Consumer Protection

As a responsible consumer, you pull a copy of your report annually to review the information and make sure it is up to date and accurate.  Studies show that 1 in 5 American consumers have errors on their credit report and need to embark on the dispute process to correct the inaccurate information.  Under the Fair Credit Reporting Act (“FCRA”) you have the right to dispute the inaccurate information with the credit reporting agencies, but launching an investigation the wrong way could set you back.  Making a mistake is more common than one would think.  Below is a list of the top five most common mistakes made during the dispute process and tips on how to avoid them.

The first and most widely made mistake is disputing information on your credit report without knowing exactly what is reported.  Prior to writing a dispute, pull an updated copy of your credit report.  Do not rely on a credit denial or information from a third party about what is on your report.  Make sure you see your report and review the information prior to launching an investigation.  You are entitled to one free copy of your report annually at from each of the three credit reporting agencies.  If you are denied credit you are entitled to a free report from the agency the lender used to base its decision.

A second common disputing mistake is drafting an unclear dispute.  Make sure your dispute letter can be understood.  Be clear about what you are disputing and why you are disputing or the credit reporting agencies may refuse to investigate because they do not understand what you are requesting.  Court cases deciding these issues have held that if a consumer fails to properly notify the agency why the item on a credit report is wrong, one cannot fault them for not investigating correctly.  Making sure to lay everything out for the credit reporting agency will likely result in the information being corrected or at least your rights being protected.

A third mistake made by consumers during the dispute process is failure to provide the bureaus with adequate information.  Just like being clear and concise, providing the bureau with documents to support your position will help ensure a positive outcome. Don’t rely on the bureau to hunt for information that you can provide.

A fourth common mistake for consumers during the loan application process is to dispute immediately before submitting the application.  Under the FCRA, the bureau has 30 days to conduct an investigation.  During the dispute process, the item is removed from your report and not included in your credit score or seen by a lender.  This may hurt your score or report if you do not have enough other information for a lender to consider.  Notifications of an account in dispute may hold up an application and if you are in a hurry for approval this may delay the process.  Make sure to dispute well in advance of loan applications or, if possible, wait until after the loan is approved.

The fifth disputing mistake is to dispute online when a more detailed, written letter is required.  The credit bureaus all have online dispute processes that are very easy and convenient.  They are even easier and more convenient for the credit bureaus because they do not have to have a human being working on your dispute.  Your online dispute is automatically, electronically sent to the creditor, or company furnishing the information.  However, the online disputes provide a drop down menu of choices for your dispute, and then only 100 characters to type in anything extra.  Often times, the pull down menu does not provide the reason that the consumer may have for the report being inaccurate, and often 100 characters of space is insufficient.  Then, you are not providing a proper dispute that could hold the credit bureaus accountable to do what the law requires.  A letter allows one to articulate to the credit bureaus why they are reporting and provides the best chance of getting it corrected.

Under the FCRA, a consumer should dispute inaccurate information in the event an account does not belong to the consumer, the payment history, balance history or status (whether the account is open or closed) is inaccurate, the account should have been removed from your report due to age, and/or the date of delinquency is inaccurate.  If you believe your rights have been violated under the FCRA and you would like to speak with an attorney, contact SmithMarco P.C. for a completely free case review.