Thanks to modern technology, you can do just about anything online, including dealing with errors on your credit report. While it sounds easy to initiate a dispute through the credit reporting agency’s website, it may not be a good idea.
In fact, to get the best results and to ensure complete accuracy in your credit reports, it is better to use a more traditional approach. If you’re searching for how to dispute your credit report online, you may want to keep reading about why it’s not the best option.
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Are credit report errors common?
People commonly assume the information on their credit reports is entirely accurate. And if you don’t look at your own credit report, it’s impossible to know what’s listed there.
According to a report by the FTC, 20% of consumers have an error on one or more of their credit reports. Of these errors, 5% could impact their ability to get credit or a loan or change the terms of the loan.
Not only do creditors and credit bureaus make mistakes, it’s also possible that you have been a victim of identity theft without even knowing it. That’s why it’s important to check your credit reports regularly.
By law, you are entitled to one free credit report from each of the three major credit reporting agencies once a year. There are numerous credit reporting agencies, but the three most recognized and utilized are Equifax, Experian and TransUnion.
Each agency is independent of the others and may include different information. Creditors aren’t obligated to report to any of the agencies. They choose which ones they provide information to.
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Why do credit reports matter?
You might assume you don’t need to worry about your credit report unless you’re applying for a mortgage loan or credit card. However, your credit history can be used in many other situations as well, including the following:
- Landlords often check credit history when approving a rental application
- Many utility companies run a credit check to determine if a deposit is needed
- Insurance providers request credit information when determining rates on a car or home loan
- Employers may request a credit report when making a hiring decision for a job application
Credit history can impact your life in many ways even if you aren’t applying for a credit card, mortgage, or auto loan. And if you are, inaccurate information can cause the application to be turned down or for an approval to result in less favorable terms.
What inaccuracies should you look for?
Any information listed on your credit report may be inaccurate. Personal information, such as previous addresses, the name or information about previous employers, may not be that important. Other information, such as names you have used and account data, can be critical.
Some typical errors seen on credit reports which could have an impact include:
- Name misspellings
- Balance or payment information for credit accounts
- Length of credit history
- Accounts which don’t belong to you
All of these items have the potential to influence creditors’ decisions when you apply for credit or a loan.
For example, you may see a credit card account with a past due amount that you don’t recognize. Once the dispute is initiated, it can be determined that the account belongs to another person with the same name as yours.
Another issue that happens frequently is creditors failing to update changes in balances or other information.
They may stop reporting data from your account so that whatever information is included is outdated. Likewise, old accounts that are past the seven years’ reporting requirement may not fall off like they are supposed to.
What options do you have for disputing errors?
In the past, you had to send a letter to the credit reporting agency disputing the negative information on your credit report. Thanks to advances in technology, the credit bureaus made it easier to file a dispute by allowing you to submit it online.
If you request a credit report from the agency or another credit monitoring site, you usually have the option to file a dispute for any errors. Simply click on a link and it will take you to the place where you can file the dispute.
While you will also be provided with the physical address for mailing the dispute, many consumers like the idea of doing it online because it’s faster and easier. What they don’t realize is the two options are not the same.
Why shouldn’t you file a dispute online?
There are two basic reasons not to file your dispute for credit reporting errors online. First, there is no paper trail, which could be essential to getting these items removed from your credit history.
When you send a letter of dispute, it’s recommended that you send it certified with notice of receipt. This ensures you have proof of the date when you sent the dispute.
Why is the date important? Because credit reporting agencies are obligated by law to remove any information that cannot be verified within 30 days.
If you don’t have proof of the date when you sent the dispute, you cannot use this law in your favor. With online disputes, there is no paper trail and you may not receive an email confirmation or any other notice of dispute request.
While the credit reporting agencies may make every attempt to follow through on disputes, it’s easy for one to get lost in the system. Sometimes, creditors can refuse to verify the requested information, even though they are obligated to do so. If that happens, the data should come off your record.
The second reason not to file a dispute online is that the information isn’t handled in the same way. The Fair Credit Reporting Act was developed to protect the consumer from unfair credit reporting practices.
It was revised to include online disputes under Section 611a(8). In this section, it says that the agency may disregard other paragraphs if the information is deleted within three days of notice of a dispute.
The paragraphs to be disregarded include the following requirements:
- The credit reporting agency doesn’t have to forward the dispute and other information to the creditor.
- The credit reporting agency doesn’t have to send you with written results from the investigation of the dispute.
- The credit reporting agency doesn’t have to show the method of verification.
All of this information is important if you want to proceed with fighting the negative information in your credit reports. In addition, the type of delete in this situation may be a soft or temporary delete, which can then be reinstated when the creditor reports the next time.
This happens because the agency doesn’t have to send information for the dispute to the creditor. What this means to you as the consumer is that the information which is disputed and deleted from your report can come back on in as little as 30 days.
Can inaccuracies hurt your credit score?
Some of the inaccurate information on your credit report can be hurting your credit score and influencing your ability to obtain new credit or get the best terms.
Many people review their credit reports because they want to improve their credit score. Removing incorrect information can raise their scores by 10, 20, 50 or even 100 points, depending on the type of information and age of the items.
What’s the best way to file a dispute?
If you see incorrect information on your credit report, it is possible to dispute it and have it permanently removed.
To do this, send a written request for verification to the credit reporting agency and send it certified with a notice of receipt. Sending a certified dispute letter ensures you know the agency received your request and you have a paper trail with a date to begin the countdown for removal.
Make sure you send separate dispute letters to each agency that has the information even if it is the exact same.
Not only are all of the credit reporting agencies separate entities, they also do not share information with each other. Even if you have the data removed from one report, it may stay on the other reports until you submit another request.
Submitting an online dispute with a credit reporting agency may seem like the fast, easy way to get the results you want, but it may not work out in your favor.
It’s better to take longer to get the information removed permanently than to try to take a shortcut that won’t work over time. A temporary solution isn’t a real solution at all. It’s better to take a little longer for a permanent resolution that gives you the right results.