How to fix inaccuracies on your credit report

Errors on your credit report can lead to serious financial implications. Negative inaccuracies can harm your credit score, and a decline in your score—whether due to an error or not—can have costly consequences.

A low credit score can hinder your ability to secure financing options such as credit cards, mortgages, and auto loans. If you manage to find lenders willing to assist you despite a poor score, you will likely face higher interest rates and fees on borrowed money.

Thus, it's crucial to take action if you uncover any errors on your credit report. If you haven't reviewed your credit reports recently to ensure their accuracy, it's essential to make this a regular practice.

The following guide will help you navigate common credit errors you may encounter on a credit report. You'll also find four straightforward steps to follow if you need to correct any errors yourself.

Review your credit reports

To ensure the accuracy of your credit reports, it’s essential to check your credit information from the three major credit bureaus: Equifax, TransUnion, and Experian. Thanks to the Fair and Accurate Credit Transactions Act (FACTA), enacted in 2003, you are entitled to a free copy of each of your consumer credit reports once a year.

Head to AnnualCreditReport.com for free weekly access to your credit reports.

Record any errors you find

Once you’ve downloaded your credit reports, it’s important to examine each one thoroughly. Make a note of any inaccuracies you find so you can determine if you want to dispute them later on.

Some credit reporting errors can be more alarming than others. Pay close attention to any mistakes that might suggest you are a victim of identity theft or that your credit information has been mistakenly combined with someone else's.

As you go through your reports, watch for these common credit report errors:

• Incorrect personal information (e.g., name, address, previous addresses, date of birth, or Social Security number)
• Accounts that do not belong to you
• Invalid account numbers
• Duplicate accounts
• Incorrect payment statuses
• Wrong account balances or credit limits
• Outdated negative items (e.g., late payments older than seven years)

Draft a dispute letter

After pinpointing the errors you wish to challenge, craft a letter to send to the relevant credit bureau. If inaccuracies appear on multiple credit reports, you'll need to submit disputes to each bureau individually.

Ensure that each dispute letter clearly lists the erroneous credit items you want the bureau to investigate, including their account numbers. Additionally, explain your reasons for disputing the information on your credit report.

You can find free templates for dispute letters from the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB). Alternatively, you can submit disputes online through the websites of each credit bureau.

However, many experts, including the National Consumer Law Center, recommend against filing disputes online. Sending certified dispute letters via mail rather than submitting them online may help you avoid limitations imposed by pre-filled options, lack of documentation, and other potential issues.

Await a response

Once you send your dispute letter, a credit bureau has 30 days (or 45 days in certain cases) to investigate your claim. After the investigation concludes, the bureau will inform you of the results.

Here are some of the most common possible outcomes you might face following a credit dispute:

If you disagree with the outcome of a credit dispute, you can attempt to submit a follow-up request for additional investigation. Alternatively, you might consider escalating the issue and filing a complaint with the CFPB, including evidence that you previously submitted a dispute that did not resolve the issue.

Final thoughts

Credit inaccuracies can seriously disrupt your financial well-being, making it challenging to qualify for top credit cards, loans, and other financial products. Therefore, it's crucial to regularly check your credit reports for accuracy and take action if you encounter any mistakes. You have rights under the Fair Credit Reporting Act (FCRA), but it's your responsibility to assert those rights and safeguard your interests.