Now that you are familiar with your credit report, you have have already noticed information that is either incorrect, outdated, or doesn’t belong to you. The first step in successful credit repair is to work to eliminate the incorrect information.
Guide to Removing Outdated Information
Often credit repair guides put the entire focus on the dispute process, but this should only be used to dispute information that isn’t valid. One of the biggest mistakes you could make is to dispute every negative account on your file. While there have been instances where legitimate negative accounts will be removed this way, the damage done will far outweigh the positives the majority of the time. This is the case if you are going to be shopping for financing that will include manual underwriting. We will get into strategies to remove negative entries in a later chapter, but for now, the focus will be to remove incorrect or outdated information.
Since the enactment of the FCRA, consumers will find it easier to remove incorrect information off of their credit report. Don’t confuse the word easier with the word easy. It can still be somewhat challenging and time consuming to get this information removed or changed. Don’t panic, being meticulous will go a long way to getting your report clean. The process of removing incorrect information is known as a dispute.
The credit reporting agencies must make a concerted effort to contact the creditor and respond to you in roughly 30 days to provide you with one of two results. If the creditor has verified the information, the FCRA does not require the agency to make any changes. If the agency is not able to verify the information, or the original creditor does not respond in a timely fashion, they must remove the information according to your request, and provide you with an updated credit report.
Locating Outdated or Inaccurate Information:
The very first step that any consumer should take is to prioritize. You want to be able to tackle the truly harmful entries first. Things such as late payments on a revolving account can decimate your credit score. Credit repair is a multifaceted process, and making sure you follow the process the right way can save you time in the end. It is also important to look at the last two years worth of information, as those have the most impact in relating to credit scoring.
The first accounts to look for are revolving accounts that have been reported late sometime within the last several years. Were these payments actually late? Look back at previous statements and cancelled checks. If these are reporting inaccurately, place a mark next to it on the report.
The next step is to look for any collections or charge offs on your credit file. These are trickier to deal with in general. First, check to see if these accounts belong to you. Collection agencies are not known for their ethical behavior. Many times, they will place collections accounts into the wrong consumers file. If you see any that do not belong to you, place a mark next to it. If you are unsure if this account belongs to you, wait. We will cover that in a later chapter.
Below is an example of the types of items that should be disputed.
- Accounts belonging to someone else.
- Late payments when you have paid on time.
- Balances higher than they should be.
- Debts incurred by a spouse prior to marriage.
- Duplicate accounts.
- Public record showing as unpaid, that was actually paid, dismissed or discharged.
Inaccurate information is idefined in section 611 of the FCRA. The more detailed you can be in your dispute, the more likely you will get a timely and accurate assessment of your dispute.
FCRA section 605 relates to the time an item can report, but in the repair sense, you should be most concerned with how long an adverse item can report. The law states that an item cannot report longer than seven years past the date of first delinquency (in the case of a charge off or collection account) or seven years from the time of the late payment in regards to revolving accounts or installment accounts. One of the most common errors found on a credit report is old, negative information from years past the 7 year cut off date.
Below is an example of the types of information that should be disputed if outdated:
- Accounts that have been placed into collections.
- Accounts that have been charged off.
- Bankruptcy.
- Paid tax liens.
- Paid judgments.
- Overdue child support.
TIP! The credit reporting agency has ultimate discretion as to what information appears on your credit file. Disputing older accounts that are still within the valid report window, but older than 5 years will sometimes yield their removal. The older the account, the more likely agency won’t work to have it verified. Verifying information takes time, and if the account was scheduled to fall off in the next year or so, they may not want to waste their time. This is the only instance in which you should dispute valid information.
Disputing The Information Online:
The old school approach to repair involves sending multiple forms and letters to the credit reporting agencies. In todays internet centric society, this can easily be done online.
Whenever you purchase (or request) your annual reports online, there is usually a link to each of the agencies websites for disputing. Each agency is slightly different, but the gist of the process is exactly the same. For each entry in your report, you will have the option to dispute. When you select dispute, it will provide you with multiple choices you can select for the dispute. Below are examples of dispute options.
- The item is not mine
- The account status is incorrect
- The item is too old to be included on my report
There are many more options, but you need to select the most accurate dispute criteria as how it pertains to what is inaccurate. There will usually be a small text box to enter more information. Be concise and to the point; they often will give you 200 words or less to state your case.
After you submit the disputes, the credit agency will have 30 days to investigate and respond to you. The response is usually done by email, and they will send you a link to an updated report if they made any corrections.
Disputing Information By Letter:
Another way you can dispute information is by drafting a letter and addressing it to the credit reporting agencies. There are multiple ways to draft dispute letters, but there is one rule of thumb; make sure you keep it short and simple. You also want to include all disputes in one correspondence. The more letters you send, the longer it could take for them to investigate your claims.
Once you have drafted the letter, it is time to send it! The agencies will often change their official postal address, so it is good to check their official website for the most current address. Mailing addresses and website contacts are listed in Appendix B: Contacts
TIP!: It is always a good idea to send any official correspondence with creditors or collection agencies by certified mail. Make sure you request a return receipt. It can be a little pricey, so you will need to use your best judgment.
After sending your dispute, you need to allow the agency time to do their investigation. They will usually send you a letter indicating they are starting their dispute. If you do not receive this letter, you may have to send your letter again. Once your dispute is initiated, the agency should send you its completed investigation and response within 45 days.
Once the Credit Reporting Agency Responds:
The credit reporting agency should respond in a timely fashion. Once they complete their investigation, they will supply you with an updated report. On the first or second page there should be an explanation of what has occurred. There are three possible outcomes to an investigation.
- Verified No Change: This means the creditor supplied compelling enough information for the agency to report it as verified.
- Deleted: This means the account was removed as if it never occurred.
- Updated: There was some piece of information on the listing that was changed.
Disputing information isn’t a perfect science. Sometimes, even if you feel the dispute is justified, the agency will not see it your way. This time, you want to draft a second letter and address it to their attorney or legal department. Make it simple and to the point. Indicate you feel they were incorrect to keep these items on the report, and demand to see the proof. They are required by law to send this to you. Be persisten;, you may have to send multiple letters to get the errors corrected.
If this doesn’t work, the only steps left are to report this to the Federal Trade Commission or file a lawsuit against the agency in question. Be warned; suing a credit reporting agency is a difficult task and should only be used as a last resort to remove legitimately bad information from your credit file.
For more information about filing a lawsuit against the credit reporting agency, you can contact the FTC at:
1-877-FTC-HELP.
This article was last updated on March 15, 2023