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Credit Reporting

How to Dispute Credit Report Errors and Protect Your Financial Future

August 8, 2023 • Editors at Varo

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A 2021 Consumer Reports investigation using 6,000 volunteers found that one-third of consumers had errors on their credit reports. Of that one-third, 29% found errors regarding their personal information, and 11% found account errors. 

Last year, consumers filed nearly 645,000 complaints about credit errors to the Consumer Financial Protection Bureau (CFPB), marking a more than 2.5-fold increase since 2021.

If left unresolved, credit report errors could lead to a decreased credit score which then could result in other credit issues with higher interest rates, denied loans, or even missed job opportunities. To make matters worse, simply viewing your credit reports to check for mistakes can be a challenge, as credit bureaus and third parties often make it seem the only way to review your credit report is with a paid membership. 

But you can repair damage to your credit report if you find an error. 

By the way, did you know that you can monitor your credit score for free, right in the Varo app?1 

Why Credit Report Accuracy Matters

When you apply for a loan, credit card, apartment, or job, your credit reports will often be reviewed as part of the decision-making process.

Errors on your credit report can sometimes result in negative credit impacts in the future, such as:

  • Higher interest rates on loans and credit cards that could have an increased long term cost compared to the the original balance

  • Denied applications for mortgages, auto loans, or rental housing

  • Difficulty securing employment in certain business industries

  • Higher personal security deposits requests to due bad or insufficient credit

Common Types of Credit Report Errors

While there are countless ways that inaccuracies can creep into your credit file, some errors are more common than others. It may be important to remember these error types:

1. Personal Information Errors

  • Misspelled names or incorrect variations (e.g., Robert instead of Bob)

  • Out of date or incorrect addresses or phone numbers

  • Inaccurate Social Security numbers or birth dates

  • Accounts or information belonging to someone with a similar name

2. Account Status Errors

  • Payments incorrectly reported as late, missed, or delinquent

  • Closed accounts falsely listed as open

  • The same debt is listed multiple times, inflating apparent balances or debt to income

  • Incorrect credit limits or loan amounts

  • Accounts wrongly labeled as past due, in collections, or charged off

3. Fraudulent Accounts or Identity Theft

  • Credit accounts or inquiries you don't recognize

  • Addresses where you've never lived

  • Authorized user accounts you didn't agree to

  • Signs of tampering, such as unfamiliar employers or aliases

4. Outdated Negative Information

  • Derogatory marks (e.g., late payments, collections) that exceed the 7-year reporting limit

  • Expired Chapter 13 bankruptcies still listed after 7 years

  • Paid tax liens or civil judgments that should have been removed

  • Expired credit inquiries remaining past the 2-year mark

How to Check Your Credit Reports for Errors

Thanks to the Fair Credit Reporting Act, you're entitled to one free credit report from each of the three major bureaus (Equifax, Experian, and TransUnion) every 12 months. This one free credit report can be used to check for any inaccurate information that may injure your financial health. 

Obtaining Your Free Credit Reports

An authorized source for free annual credit reports is AnnualCreditReport.com. Here's how to get yours:

  1. Visit AnnualCreditReport.com and click "Request your free credit reports"

  2. Fill out the online form with your personal information and select the reports you want

  3. Answer a series of identity verification questions based on your credit history

  4. View and download your credit reports securely

Reviewing Your Reports Thoroughly

Once you have your credit reports in hand, it can be important to review them carefully. Here are some things to look for:

  • Check each section of your report, including personal information, credit accounts, and public records

  • Verify that all accounts listed belong to you and that the details (e.g., balances, payment history) are accurate

  • Look for any unfamiliar inquiries or addresses that could be signs of identity theft

  • Make a note of any negative items that should have aged off your report (most drop off after 7 years)

  • Don't forget to check all three reports individually and compare them against each other

Gathering Evidence and Documentation

The number of complaints to the Consumer Financial Protection Bureau about credit report errors has more than doubled in recent years. For this reason, gathering clear and supportive evidence can be one of the most crucial steps when figuring out how to repair your credit

Organizing Your Evidence

As you gather your supporting documents, it may be helpful to create a system to keep them organized and easily accessible. You can make copies of relevant pages and highlight the pertinent information. If submitting a dispute by mail, you may want to send copies rather than originals and keep a complete set for your records.

Examples of Evidence to Submit

When disputing errors on your credit report, presenting clear and pertinent documentation can be essential to getting errors removed from your credit report. Here are examples of documentation you might gather and submit:

  1. Proof of Identity

    • Government-issued ID card (driver’s license, passport).

    • Social Security card.

    • Birth certificate.

  2. Proof of Address (both current and former)

    • Utility bills with your name and address.

    • Bank or credit card statements.

    • Lease agreement or mortgage statements.

  3. Account Documentation

    • Relevant credit card or loan statements indicating account status and payment history.

    • Letter of account closure or payoff confirmation.

  4. Discrepancy Evidence

    • Any correspondence with creditors or credit bureaus about the disputed issue.

    • Police reports or an Identity Theft Report if the dispute involves fraud or identity theft.

  5. Payment Records

    • Bank statements showing payments made that are not reflected in the credit report.

    • Canceled checks or electronic payment confirmations as proof of timely payments.

  6. Credit Report Annotations

    • A copy of the credit report with errors outlined to clearly indicate the disputed items.

  7. Legal Documents

    • Court documents relevant to bankruptcies, judgments, or liens that may have been resolved but inaccurately reported.

    • Official letters or documents from creditors acknowledging an error or agreeing to remove an incorrect or disputed item.

  8. Correspondence Logs

    • Records of communication (dates, names, and summaries) with creditors or credit bureaus regarding the dispute.

Gathering these documents before initiating your dispute can help streamline the process, which could support your claim more compelling.

Note: It may be helpful to always remember to send copies and retain the original documents for your records.

What If You Don't Have Documentation?

While having documentation can help strengthen a disputed case, many people don't let a lack of paperwork deter them from filing a dispute. You can still explain your position in a dispute letter and provide supporting documentation that may help backup your claim.

How to Dispute a Credit Report Error

To assist with the dispute process, it may be helpfult to dispute errors with both the credit bureau that produced the report and the company that provided the inaccurate information (known as the information furnisher.)

You can submit disputes to the three major credit bureaus online, by phone, or by mail. When submitting your dispute, be sure to:

  • Identify each item you are disputing

  • Explain why you believe the information is inaccurate

  • Request that the error be removed or corrected

  • Include copies of any supporting documentation

  • Provide your complete name, address, and a copy of your government-issued ID

Contacting Credit Bureaus to Dispute Errors

Equifax

 P.O. Box 740256

Atlanta, GA 30374-0256

Experian

P.O. Box 4500 

Allen, TX 75013

TransUnion

P.O. Box 2000 

Chester, PA 19016

Contacting Information Furnishers

In addition to disputing errors with the credit bureaus, it can also be a good idea to contact the company that supplied the inaccurate information. This could be a lender, credit card issuer, or debt collector.

When contacting them,you can follow the same guidelines for disputing with the credit bureaus – identify the error, explain why it's inaccurate, and request a correction.

Crafting Your Dispute Letter

While the credit bureaus and information furnishers offer online dispute forms, submitting your dispute in writing provides a paper trail.

Key Components of a Dispute Letter

Your dispute letter can include the following elements:

  • Identifying information: Your full name, address, and Social Security number

  • Report details: The name of the credit bureau and the report confirmation number, if available

  • Disputed items: A clear list of each item you are disputing, along with an explanation of why you believe it is inaccurate

  • Supporting documentation: Copies of any evidence that supports your dispute, such as account statements or court records

  • Request for action: A statement asking the bureau to remove or correct the inaccurate information

  • Your signature: A handwritten or electronic signature to verify your identity

What to Expect After Submitting a Dispute

Under the Fair Credit Reporting Act (FCRA), credit bureaus must investigate your dispute within 30 days of receiving it (45 days if you submit additional information during the investigation). They are also required to forward your dispute to the information furnisher within five business days of reaching a conclusion.

The information furnisher then has 30 days to investigate and report to the credit bureau. If they see that the disputed information is inaccurate, they must also notify all three credit bureaus to correct the error across all your reports.

Potential Dispute Outcomes

There are a few possible outcomes once your dispute is submitted:

  • The error is corrected: If the investigation confirms that the disputed information is inaccurate, it will be removed or updated on your credit report.

  • The disputed item is verified: If the information furnisher verifies that the disputed item is accurate, it will remain on your report.

  • The dispute is deemed frivolous: If the credit bureau determines that your dispute is irrelevant or incomplete, they may dismiss it as frivolous. They must notify you of this decision within five business days.

If you disagree with the outcome, you have the right to add a brief statement to your credit report, which will be included in future credit reports and available for potential lenders to view. 

Protecting Your Credit Going Forward

Disputing errors on your credit report can be an important step toward maintaining a healthy credit profile. But it's not a one-and-done task. To keep your credit in good shape, it may be a good idea to make a habit of:

  • Checking your credit reports regularly: Take advantage of each bureau's free annual credit report and review them thoroughly for errors or signs of identity theft.

  • Practicing good credit habits: Pay your bills on time, keep credit card balances low, and avoid applying for new credit unnecessarily.

  • Considering a credit monitoring service: For added peace of mind, you may want to sign up for a credit monitoring service that alerts you to any changes or suspicious activity on your credit report.

Tools and Resources to Regain Financial Wellness 

An accurate credit report can be crucial for achieving your financial goals, whether that's improving your credit scores, applying for a mortgage, or striving for financial wellness. And Varo Bank can help!

You can easily monitor your credit score right in the Varo app1, so you’ll be the first to know when your score changes.

Plus with the Varo Believe secured credit card2 you can establish or help build credit without taking on debt – Varo Believe customers, on average, see a 40-point increase in their credit score after three months of on-time payments!3

Here’s to improved credit and a stronger financial future. 

¹Varo provides access to your VantageScore 3.0 from TransUnion®.  The VantageScore is a credit score alternative to the FICO score. VantageScore and FICO use different models and weigh factors differently when determining a credit score.Varo displays credit data at our discretion to customers that opt in.

²Varo Believe is a secured credit card designed to help you build credit; however, a variety of factors impact your credit and not all factors are equally weighted. Building credit may take time and Varo Believe may be able to help when you consistently make on-time payments.

³Customers who had an existing VantageScore® 3.0 credit score showed an average VantageScore® 3.0 score increase of approximately 40 points after three months of having Varo Believe and no late payments on their credit. Individual results may vary, and some customers may not see a score increase. As of July 3, 2024.

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