Have you recently checked your credit report and discovered some incorrect information? A mistake or error in your credit report can lower your credit score. It can then impact your ability to get approval for a loan, credit card or mortgage. Here is our comprehensive guide on how to dispute incorrect information on your credit report.
How common are errors in credit reports?
Actually, errors are more common than you might think. A survey by Which? revealed that one in five people have found an error in their report.
So, how does an error end up in your report?
In most cases, it will be because a lender, creditor or financial institution provided incorrect information to a credit reference agency (CRA). It could also be due to an administrative error in recording your financial history.
What kinds of errors can appear in your credit report?
There’s a wide range of possible errors.
It could be as simple as an incorrect address. However, it could be something more serious, such as a late payment that you actually made on time.
In the worst-case scenario, an error could be a credit product, such as a loan or credit card, that someone fraudulently obtained in your name.
All of these errors can affect your credit score and make it difficult for you to get credit.
That is why it is important to review your credit report on a regular basis. By doing so, you can identify any errors and then take appropriate action.
How can you dispute items in your credit report?
The first step is to contact the lender or company in question. Of course, you’ll need proof that the issue you’re disputing is, in fact, an error. As a result, it is critical to have supporting documents on hand, such as receipts, statements or a police report (in the case of identity theft).
If the lender or company agrees that the issue is an error, they should update their records and send the update to the credit reference agency.
Alternatively, you can contact the CRA directly. They will contact the lender on your behalf. The CRA usually has 28 days to deal with the dispute and confirm the action it will take.
If the lender that provided the information confirms the error is real, the CRA will correct your report.
What can you do if an error is not corrected?
If you have contacted the CRA and the original lender or company about an obvious inaccuracy that they are unwilling to correct, you can complain to the Information Commissioner’s Office (IOC). However, this should be your last resort.
During the dispute process, it’s possible to put a notice of correction in your credit report until the issue is sorted. This is essentially a 200-word explanation of why an item appears on your report and why it is not necessarily indicative of your overall financial habits.
Where your credit report data is accurate but you would like to explain the reason behind a particular item, you can also use a notice of correction to accomplish this purpose. It is free to add a notice of correction and it will not have an impact on your credit score.
One final thing worth noting is that if you come across an error in your credit report from one of the three credit reference agencies (Experian, Equifax and TransUnion), there is a good chance that the error will also appear in your credit file with the other two agencies also.
You should therefore check your credit report at all agencies and file a dispute with each agency separately. This should ensure that the information is updated everywhere.