How to Appeal a Bad Credit Rating

About 70 to 80 percent of credit reports contain errors that drag down the credit ratings. Such errors can lead to inability to get loans and credit cards. If you suspect that your credit rating contains errors, you may be able to correct them by starting a dispute. However, this process may take time, effort and a lot of patience. You will find it easier to resolve the problem if you have the financial documents to support your case.

Things You'll Need

• The denial letter from the lender.
• A current copy of your credit report, preferably from each of the 3 major reporting bureaus.
• A computer with word processing capabilities and a printer.

Instructions

1. Get a copy of your credit report from each of the three credit agencies: TransUnion, Experian and Equifax. These reports have to be no more than 90 days old, according to Bankrate. By law, you can order a free copy from each credit bureau every 12 months.

2. Review all three credit reports. A credit report usually lists each of your accounts in the "Account Information" section. It contains details such as the type of account, the date you opened it, the balance you owe on the account and whether you missed any payments. Check for inaccuracies.

3. Call the company that provided the inaccurate information and explain the problem. The company may admit the mistake and update or correct it. The company may also provide you with the supporting document you need to resolve the problem with the credit bureaus.

4. Write a letter to each of the three credit bureaus. The bureaus let you file online disputes, but MSNBC advises against using these online forms because they encourage the bureaus to automate your dispute. Identify yourself by providing your name and Social Security number. Describe the inaccurate information and provide supporting documents. Include your contact details and send the letters by mail with return receipts.

5. Make two copies of your letter. Keep one for your record and send the other one to the company that provided the credit bureaus with the inaccurate information. Again, send the letter by mail and request a return receipt.

Tips & Warnings

• Document everything. When on the phone, write everything down, including names and dates.

• Confirm receipt on everything you mail. If you send documents to a bureau or creditor as proof of your dispute, you should send them Certified Mail - Return Receipt Requested. This will help you ensure that prompt action is taken on corrections and that you have proof that you provided them with documents.

• Check your credit every 3-6 months. The frequency depends on the amount of activity and the number of errors you found, but it is wise to monitor changes to make sure that no further mistakes are made.

• Don't apply for credit too often - this will hurt your scores.

• Don't dispute accurate reports. The bureaus must report accurate information.

• Be patient - correcting credit reporting errors can sometimes seem impossible, and can be very frustrating.

References

• Bankrate; Disputing and Correcting a Mistake on a Credit Reports; October 2003
• Bankrate; How to Fix Credit Report Errors; Leslie McFadden; February 2010
• MSNBC; How to Complain About Credit Report Errors; Bob Sullivan; April 2009
• Bankrate; ABCs of Credit Reports; Leslie McFadden; June 2007
• Bankrate; How to Correct a Credit Report Error; Leslie McFadden; February 2010

Resources

• Read this Article in Spanish