Can a Creditor Remove an Error in My Credit Report?
Credit report errors are not uncommon. Bob Sullivan, a Red Tape Chronicles columnist with MSNBC, warns that 16 to 25 percent of consumer credit files have mistakes that can hurt future credit applications. Inaccuracies can happen when the Equifax, TransUnion and Experian credit bureaus input data, but creditors sometimes provide them with flawed information. Creditors also play a role in removing the errors.
Other People Are Reading
-
Definition
-
Credit report errors are incorrect pieces of data in a consumer's file. Some mistakes, such as a misreported former address, telephone number or misspelled employer name, are not likely to cause problems. Other errors are more serious, like accounts that show as delinquent when payments actually are on time, and low balances reported as excessively high. FICO, the biggest credit score company, explains that these things lower credit scores and make lenders more likely to reject applications.
Process
-
The Fair Credit Reporting Act is a consumer protection law spelling out how to remove credit report errors, advises the Federal Trade Commission. Consumers can dispute errors with the credit bureaus, which bear the responsibility of contacting creditors. Each bureau gives one free credit report per year through Annualcreditreport.com, as required by the law, and maintains an electronic dispute form on its website. The FCRA allows 30 days for the bureaus to get creditor verification. Otherwise, they must remove the incorrect entries from their records.
-
Alternative
-
Consumers can contact creditors directly about credit report errors after unsuccessful disputes, the FTC explains. Sometimes a lender provides verification that meets the credit bureaus' requirements, even though the account holder does not agree with the information. That person can write a dispute letter to the creditor challenging the data, explaining the reasons and asking it to stop reporting the erroneous information to the credit bureaus.
Considerations
-
Creditors directly challenged may still claim they are right and refuse to remove disputed information from credit reports. Consumers can send explanatory statements to the credit bureaus, which the bureaus must include in the credit reports, according to the BCS Alliance debt reduction website. This way, potential lenders see the other side of the story and may consider it when evaluating applications.
Benefits
-
Divorcenet, a legal advice website, explains that credit report errors are sometimes beneficial because they help consumers get rid of negative items. Creditors do not always respond when bureaus ask for account validation, and bureaus are sometimes too busy to conduct a thorough dispute investigation. The questioned entry is completely erased because it was not verified, improving the consumer's credit rating.
-
