Thanks to modern technology, you can do just about anything online, including dealing with errors on your credit report. So while it sounds easy to initiate a dispute through the credit bureaus’ website, it may not be a good idea.
In fact, to get the best results and ensure complete accuracy, 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.
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 personal credit report, it’s impossible to know what’s listed there.
According to a study by the Federal Trade Commission (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 loan terms.
Not only do creditors and credit bureaus make mistakes, but it’s also possible that you have been a victim of identity theft without even knowing it. That’s why it’s important to review your credit reports regularly.
Your Free Annual Credit Report
By law, you are entitled to one free credit report from each of the three major credit bureaus every twelve months. There are numerous credit bureaus, but Equifax, Experian, and TransUnion are the most recognized and utilized.
Each credit reporting company is independent of the others and may include different information. Creditors aren’t obligated to report any information to the credit bureaus. Instead, they choose which ones they provide information to.
Why does an accurate credit report 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 can be reviewed in many other situations as well, including the following:
- Landlords often check your credit 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.
Your credit scores 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 result in less favorable terms.
What inaccuracies should you look for?
Any information listed on your credit report may be inaccurate or incomplete. Personal information, such as previous addresses, names, or previous employers, may not be that important. However, other information, such as names you have used and account data, can be critical.
Some typical errors you may find on credit reports which could have an impact include:
- Name misspellings
- Incorrect social security number
- 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, the credit bureau may determine 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 requirements may not fall off your credit report 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 bureau to dispute the negative information on your credit report. However, thanks to advances in technology, credit bureaus have made it easier to file a dispute by allowing you to submit it online.
If you request a credit report from the credit bureau or another credit monitoring site, you usually have the option of filing a dispute online. Click on a link, and it will take you to the place where you can submit a dispute.
They will also provide you with the physical address for mailing the dispute. However, many consumers like the idea of filing a dispute online because it’s faster and easier. What they don’t realize is the two options are not the same.
Why You Shouldn’t File a Credit Dispute Online
There are two basic reasons not to file your credit report dispute for credit reporting errors online.
Reason #1: No Paper Trail
First, there is no paper trail, which could be essential to remove these items from your credit report.
When you send a dispute letter, 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 the three credit reporting agencies are obligated by law to remove any information they cannot verify within 30 days.
If you don’t have proof of the date you sent the dispute, you cannot use this law in your favor. With online disputes, there is no paper trail. You also may not receive an email confirmation or any other notice of dispute request.
The credit bureaus may attempt to follow through on disputes. However, 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.
Reason #2: The Dispute Is Handled Differently
The second reason not to dispute your credit report 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 credit reporting company 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 company doesn’t have to forward the dispute and other information to the creditor.
- The credit reporting company doesn’t have to send you written results of the dispute investigation.
- The credit reporting company doesn’t have to show the method of verification.
This information is important if you want to proceed with disputing the negative information in your credit reports. Also, the type of deletion 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 credit reporting companies don’t have to send the dispute to the creditor. That means the information disputed and deleted from your credit report can come back on in as little as 30 days.
Can inaccuracies hurt your credit score?
Some inaccurate or incomplete information on your credit report may be hurting your credit scores. It may also be influencing your ability to obtain new credit or get the best terms. That’s why the Consumer Financial Protection Bureau (CFPB) recommends that you contact the credit bureaus and dispute credit report information that is inaccurate. If they don’t update or remove it, you can contact the CFPB and file a complaint.
One of the best ways to improve your credit scores is by reviewing the information on your credit report. Look carefully to find any information that may be inaccurate or even questionable. Removing incorrect information can raise their credit scores by 10, 20, 50, or even 100 points. It depends 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 bureau and send it via certified mail with return receipt. Sending a certified dispute letter ensures you know the agency received your request. It also gives you a paper trail with a date to begin the countdown for removal.
Make sure you send separate dispute letters to each credit bureau reporting the information, even if it is the same.
Each credit reporting agency is a separate entity. They also generally do not share information with each other. Therefore, even if the data is removed from one credit report, it may stay on your other credit reports until you submit another request.
Submitting an online dispute with a credit bureau may seem like a 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 from your credit report than to take a shortcut that won’t work. A temporary solution isn’t a real solution at all. Taking the time to do the dispute process correctly will give you the best results and a permanent resolution.