One in Five Credit Reports Has a Mistake on It. Here’s How to Check and Fix Yours for Free.

Photo illustration to accompany article on how to spot and fix mistakes in your credit report Clint Branch and Shutterstock

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It’s one of the most crucial indicators of your financial health — and for one in five people, it’s got an error on it.

So if you haven’t checked your credit report lately, experts say now is the time to do it.

As the coronavirus pandemic batters the economy, lenders are raising their standards to protect themselves. So having a bad credit report right now could lock you out of a debt management opportunity, like refinancing your mortgage or getting a personal loan. It could also ding your future prospects when you’re ready to buy a home or open a high-tier credit card.  

“It shouldn’t take a pandemic for people to get into good money habits, which includes regularly checking your credit. It’s always important to know what’s on your credit report. Right now, there might be an emphasis or some urgency to really check it out,” says Douglas Boneparth, president and founder of the New York–based financial planning firm Bone Fide Wealth. “That’s predicated on this notion that people are looking for ways to access liquidity and cash, should the worst happen like having a loss in income.”

Recognizing this, the three major credit bureaus — Equifax, Experian and TransUnion — are now offering free weekly credit reports online, making it easier than ever to check and make sure your credit report is accurate. 

It’s worth taking 15 minutes to do it: One in five people are likely to find at least one mistake on their credit report, according to a study published by the Federal Trade Commission. And recent data from the Consumer Financial Protection Bureau shows that credit reporting is the agency’s most common complaint, with the majority (61%) saying the complaint was due to incorrect information on their credit reports. Companies closed 72% of complaints with an explanation, 18% with non-cash relief, and 0.3% with cash relief within 2018. 

Here’s what you need to know about checking your report — and if you find something’s off, use our email template below to fire off a complaint. 

What Are Credit Reports and How Do They Work?

Your credit report tells your financial story to lenders, and it allows them to make informed decisions about your creditworthiness. 

“Your credit report is like a report card that grades how well you manage your financial obligations,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling. 

There are three credit bureaus that publish these reports: Experian, TransUnion, and Equifax. These bureaus report information from your lenders such as payment history, balanced owed, and whether you’re paying on time. If you pay your bills on time and keep your balances low, you’ll have a higher score. Conversely, if you miss payments regularly, you’ll have a lower credit score. 

Potential lenders use one or multiple reports to verify your information. They’ll also use this information to determine if you’re eligible for financing and if you are what your terms should be. Therefore, monitoring your credit reports is an essential way to stay on top of the information presented to prospective lenders. 

How Often Should I Check My Credit Reports?

Normally, experts advise checking your report at least once or twice a year as a good practice. That’s how often the three credit bureaus typically offer free reports. Checking your own credit is considered a soft inquiry, which means it will not hurt your credit score.

But the pandemic has created a new normal, and all three major credit bureaus are allowing people to check their credit reports on a weekly basis until April 2021. Deciding when to check your credit can be puzzling, but it ultimately comes down to how confident you are about your credit history. For some, checking it once a year is enough, while others may prefer to check it weekly because of the pandemic. 

“At times like these, you should anticipate things perhaps falling through the cracks,” Boneparth says.

Boneparth says checking your credit report every week may be a little excessive, but that it could also be a useful tool for anyone who has suspended or deferred payments to make sure lenders are marking their credit history correctly. 

“Banks are allowing customers to either defer or reduce payments, and the concern may be that those payments would be marked as delinquent instead of current,” Boneparth says. “For individuals who are taking their financial institutions up on whatever offers to do that, it could make sense to more regularly check your credit report to make sure everything is the way it should be.”

During normal circumstances, Boneparth recommends consumers check all of their credit reports at least once or twice a year. There’s also the option to pull one report every four months by rotating the agencies.

By doing this, you can stay on top of your information and it allows you to promptly address any inconsistencies found on your credit reports. 

All Credit Reports Don’t Present the Same Information 

When glancing at each report, it’s important to double-check the accuracy of your personal information.

“If they have your income lower than what it’s supposed to be, then it could impact your credit, especially if you carry higher balances on your credit cards,” says Michael Zahaby, adjunct of finance for Florida Gulf Coast University. Along with verifying personal information, you’ll want to make sure each of your lenders properly reports your payment history and balance information. 

Moreover, when checking your credit, there’s a section for inquiries. This is where if you applied for a loan the inquiry shows up on one or more of your reports. 

It’s important to note the information presented on all three of your credit reports might not be consistent with each other. Some lenders might only report to TransUnion while others report to Equifax. So, don’t be surprised if one account doesn’t show up on all three reports. 

Another way things could be confusing is when you apply for a retail credit card. The inquiry comes up as the bank issuing the card, not the retailer (i.e., Synchrony Bank for Amazon) so don’t be alarmed when this happens. However, if you noticed any errors in one of your credit reports, it’s important to address them right away.

How Do I Dispute Incorrect Information on My Credit Reports?

You may be wondering where to start when it comes to disputing any mistakes on your credit report. First and foremost, you should immediately contact the credit bureau(s) about your concerns through a traditional letter or email. Without proper notice, credit bureaus won’t know to correct any errors on your credit report. 

“It’s not illegal for the credit bureaus to report inaccurate information, but it’s illegal for them not to correct it when given proper notice,” says Rob Harrer, an attorney for the Chicago Consumer Law Center.

It’s important to tell your credit bureau in writing what information you believe is inaccurate. The Federal Trade Commission provides a comprehensive example of what to include in a dispute letter to a credit bureau.

When making a dispute, you’ll also want to include any documentation supporting your claim. For example, if a creditor reports you didn’t make a payment but you did, then you can show proof by furnishing a bank statement.

“At the end of the dispute letter, state exactly what you want done in a concise sentence,” Harrer says. “For example, ‘Please perform a reasonable investigation and delete the account from my report.’ I like putting in the “reasonable investigation” because that’s the language in the FCRA (Fair Credit Reporting Act) so if it ever goes to court there’s less room to monkey around.”

If you’re stuck on what to say in a dispute letter to a credit bureau, this email template will help you spot and fix mistakes in your credit report.

[Your Name]
[Your Address]
[Your City, State, Zip Code]

[Date]

Complaint Department
[Company Name]
[Street Address]
[City, State, Zip Code]

To Whom It May Concern:

I hope this [email or letter] finds you well. I am reaching out to dispute the following information on my credit report from [give the name of the credit reporting company whose report has incorrect information]. Given that, the items I am disputing are circled on an attached copy of my credit report.

[Numerically list the items you intend to dispute]
Item 1: This item [identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.] is [inaccurate or incomplete] because [describe why]. I am requesting that the item be removed [or request specific change] to correct the inaccurate information.

[Repeat the paragraph above if they are more items to dispute]

I have enclosed copies of [any enclosed documentation, such as financial records or court documents] supporting my claim. Please perform a reasonable investigation and [delete or correct] the disputed item(s) from my report as soon as possible.

Sincerely, 
[Your Name]

Enclosures: [List what you are enclosing]

Zahaby recommends confirming everything in writing, including phone conversations with a lender and to jot down names of any representatives you speak to about the dispute. With these things in mind, here’s a closer look at how each bureau handles disputes:

Experian

Experian allows you to file a dispute online or via mail. When filing a dispute, you’ll want to provide the following information:

  • Personal information such as name, address, and Social Security number
  • A copy of a government-issued ID
  • A copy of a utility bill (to verify current address)
  • The lender, account number, and reason for dispute

Equifax

Equifax also allows you to file disputes online or through the mail. Similar to Experian, you’ll want to provide your personal information, a copy of a government-issued I.D., and the lender, account number, and reason for the dispute in writing. 

TransUnion

TransUnion also allows you to file a dispute online or through the mail. Similar to the other two, you’ll want to present your case in writing with all the supporting documents, as well as a copy of your government I.D. to expedite processing. 

Pro Tip

Take 15 minutes to run your credit report (for free!) at the three major credit bureaus, and use the template above to report any mistakes.

What Happens After I File a Dispute?

Once you file all the paperwork, the credit bureau(s) reach out to the lender with the dispute to have them verify the information they reported. If they find they made a mistake in reporting, they usually have to correct it within 30 days. However, the CFPB says the usual waiting period may be extended to 45 days as a result of the pandemic, as long as “the consumer provides additional information that is relevant to the investigation during the 30-day period.” Once they do, the credit bureau sends you a corrected report. 

Why Is It Important to Check My Credit Reports?

Your credit report is an important measure of your financial health — the main thing standing between you and getting approved for a credit card or loan. That’s why it’s important to be proactive and check up on your credit reports often. The pandemic has led credit bureaus to temporarily loosen their normal standards and make credit reports more accessible, with the option to access it as often as once a week for the next year.

By doing this, you can stay on top of important financial information that affects many parts of your life. And if you’re worried you’ll impact your credit by checking it often, don’t be. Checking your own credit score is considered a soft inquiry, which means it won’t raise any red flags on your credit history. 

Catching errors early on your credit report will save you a lot of headaches when it comes time to make large purchases, such as buying a home or a car. 

“It’s always better to come at anything in your financial life from a proactive position rather than a reactive position,” Boneparth says. 

By following best practices when filing disputes, you’ll significantly better your chances of having incorrect information removed from your credit report. You may not need credit today, but making sure your credit report is accurate will make your life easier down the line — and as long as you’re checking your report through the three credit bureaus, doing so won’t hurt your credit. In fact, it can only help.