Not everyone who comes to me for help wants to file bankruptcy. Their problem isn’t that they’re dealing with overwhelming debt, but they are having trouble buying a car or a home because of errors on their credit report. Oftentimes, there are still debts showing as owing even after they have filed bankruptcy, or someone has stolen their identity to get credit.
While I specialize in bankruptcy, the following are some tips in how to take care of errors on your credit report:
- Request an investigation in writing. The first step in disputing a credit report error is to put it in writing and mail it to the credit reporting agency. You might consider mailing it return receipt requested so that you have a record of their receiving your dispute. Follow up by phone a week or so after you mail it or get the return receipt.
- Order a new report and review it for errors. New information is added to your credit report each month, so you can see if errors have been corrected. Take note of misspelled names or incorrect addresses, which be a sign of more than one individual being listed on a single credit report.
- Don’t limit yourself to the credit reporting agency’s forms. When you receive your credit report, you’ll also get a form that allows you to file a dispute. Don’t feel like you need to use this form if it doesn’t adequately describe the error. At minimum, supplement it with additional details and documents. Avoid submitting your dispute online where you might not be able to keep a record of your correspondence.
- Keep all of your communication. Make sure that you also keep notes of phone conversations. Include dates.
- Notify the creditor of the dispute. Besides sending a copy of your dispute to the credit reporting agency, you should also send a copy directly to the creditor who is furnishing the false information. Doing so will keep the creditor from arguing that it didn’t receive notice from the credit reporting agency, so it couldn’t investigate your dispute.
- Send your dispute to all three major credit reporting agencies. Since an error on one credit reporting agency’s report will probably show up on another agency’s report, make sure you file a dispute with the three major agencies: TranUnion, Experian, and Equifax.
- Be specific. When you prepare your dispute, make sure you clearly identify who you are, your address (and residential history for the last few years), which account is being disputed, and why you are disputing it. Make sure your description of the account is clear enough that even if the account is sold to a third party collector, the credit reporting agency will still be able to identify it.
- Support your dispute. Include any documentation you have to support your argument that the debt is showing up as an error. If the creditor has sent you a letter acknowledging the information they provided the agency was an error, send it to the agency.
- Show that the creditor has provided inaccurate information about others. You should investigate whether or not the creditor has a reputation for providing inaccurate information and bring it to the agency’s attention if it does.
- If you agree to pay a debt, ask the creditor to remove negative information. If you decide to pay a debt that you dispute you owe, ask the creditor to remove any negative information they have reported. They might refuse, but it doesn’t hurt to ask.
Of course, if you have several accounts that are being negatively reported to the credit reporting agencies because of late payments or failure to pay, bankruptcy might be a good option if you are unable to pay those debts. Bankruptcy will basically nullify those negative marks and “reset” your credit report so that you can rebuild your credit score. Most of my clients will see their credit score improve an average of 100 points within a year of filing.