The dispute process is a crucial step in the credit report correction process. The Fair Credit Reporting Act (FCRA) states that you can request to have inaccurate or incomplete information on your credit report corrected by contacting the company who reported it to the credit bureau and submitting evidence of inaccuracies.
However, many people are hesitant about disputing their reports because they don’t know how it may affect their scores. This blog post will discuss if fighting a credit report hurts your score and other things you should know before taking action against an error on your report.
What is a credit report, and what does it include?
Credit reports are reports that detail your credit activity. They are sent to lenders by companies called “consumer reporting agencies” or CRAs. They collect information regarding your accounts, loan repayment history, and other data which determines the risk you pose as a borrower.
Lenders use these reports to assess if they will approve you for loans, how much interest they will charge on those loans, and even the luxury goods they will offer you.
A credit score is a number that summarizes your report. It’s based on specific criteria such as debt-to-income ratio (how much you owe versus how much you make), payment history, age of accounts, new accounts opened, and several inquiries.
How to dispute an error on your credit report
If you believe errors on your credit report were made in error, then disputing those errors with the reporting bureau is a good idea. It can help to avoid unnecessary mistakes and keep everything accurate as it should be.
There are two main ways to dispute an error on your credit report. The first is to file a dispute with the credit bureau directly. This works best if you have evidence that can help support your case since it’s up to you to come up with proof for any claims instead of an entire team of people working together.
The second method is through submitting a formal letter via certified mail or fax (if you’re faxing this, be sure to include proof of the mailing date). This method often yields faster results.
Both methods can take up to thirty days for a resolution, but if it takes longer than that time frame, there may be something wrong. But, of course, the last thing someone with bad credit wants is more mistakes on their report, so it’s best to do whatever you can to prevent that from happening.
How Disputing an Error on Your Credit Report Can Improve the Accuracy of your Credit Scores
Disputes can be a challenging process, but they’re necessary to get everything out into the open and set things right.
Even if you think your credit report is perfect, there’s always going to be something someone can say was wrong, so it’s good practice to keep on top of these issues as much as possible throughout the year, even when nothing seems to be incorrect.
How to Dispute an Error on Your Credit Report?
Suppose you want to file a dispute with the credit bureau directly. In that case, you’ll need three things: your name, address, and social security number, as well as details of all errors that are incorrect, including account numbers, if possible. If it’s not possible because the information is too long, you can summarize the issue and provide a link to where more information is available online.
This method generally works best for minor errors, but if it’s something big like an account deletion or incorrect current balance amount, going through your creditor directly may be better since they have access to more information about this kind of thing.
If you’re filing a dispute through certified mail or fax, it’s best to use the sample letter provided on most credit bureau websites. This will ensure that everything is precisely how they want it and can help expedite the process in some cases. You should also include any appropriate evidence of your claims with this method, such as copies of bills, receipts, etc.
Why you should always check your credit reports for errors
You must check your credit reports for errors.
Inaccurate information can hurt your credit scores and even cause a delay of services if the incorrect information is not changed immediately. This can cause problems with your credit scores.
Another reason you should check your up-to-date credit reports is to ensure that there aren’t any accounts listed on the information that doesn’t belong to you. If this is the case, it’s likely someone has stolen your identity and opened new lines of credit in your name, which can end up costing you money if not taken care of immediately.
The worst part is that it’s easy to take action for this information to be corrected. This can help your credit scores recover faster when compared with other types of bad credit issues, such as late payments or even bankruptcy.
Checking the accuracy of your reports will also ensure that there aren’t any accounts on your information that you don’t want to be reported.
The importance of checking your credit score every year
The number of consumers who have no idea what their credit score is staggering. According to studies, 20% of respondents said they had never checked it before, while 24% hadn’t done so in more than five years. And this group was not made up entirely of millennials or younger adults.
While you might be tempted to think that your credit score is just a number and therefore has no real impact on your life, the truth is that this three-digit figure can have far-reaching effects such as how much money it will cost for lenders to borrow from you. It can even affect your ability to get a job, an apartment, or insurance.
Common mistakes people make with their money that can hurt their financial future
Taking care of your credit rating should be a top priority. Here are some mistakes you should avoid so that your credit score stays healthy:
- Closing accounts too early or keeping them open long after they’ve been used
- Imprudent borrowing behavior such as taking out more loans than necessary and failing to repay the money on time
- Not checking/monitoring your credit report regularly
- Failing to understand the difference between a credit report and a credit score
- Failure to check your free annual credit reports
Final words
If you’re looking for credit repair services, The Oasis Firm is here to help. We understand that credit issues can be a huge problem in today’s world, and we’re ready to lend you a hand. We will walk you through the steps from beginning to end so that your credit score is where it needs to be.