What is the Best Reason to Dispute a Credit Report?

Learn why and how to dispute an incorrect or incomplete entry on your credit report. Understand how long it takes and what steps are involved.

What is the Best Reason to Dispute a Credit Report?

Accounts incorrectly reported as overdue or delinquent, for example by a collection agency or other creditor, debts that appear on your credit report more than once, incorrect payment or late payment dates - these are all valid reasons to dispute a credit report. Collections are usually disputed because the debtor believes that they are wrong for some reason. For example, if you review a copy of your credit report and see a collection account that you think belongs to someone else, has an incorrect balance, or is more than seven years old, you can file a dispute. Please note that payments made to your account may not be immediately reported to credit reporting agencies.

Review your credit report to confirm that the credit agency removed inaccurate information from your report. If the company continues to report controversial information, check that the credit bureaus have placed a notice stating that you are challenging that information. If the report is not accurate, the creditor must delete the item from their credit report. If the creditor doesn't, you have reason to file a lawsuit under the Fair Credit Reporting Act. Heath points out that this is “expensive” and time consuming, so the best thing you can do is try to eliminate it through a direct challenge. You're entitled to a free credit report if you've recently been rejected because of your credit report, if you're unemployed and planning to look for work soon, if you're receiving social or government assistance, or if you've been the victim of identity theft.

John Heath, senior counsel at Lexington Law, is quick to point out that he can hire a credit repair company. Some states have laws that entitle you to a free credit report every year, in addition to the free credit report you get from other sources. If they confirm the accuracy of the credit reports, you'll likely have to live with them until the credit bureaus have to pick up the item, which normally takes 7 years if it's bad. Credit reports are extremely important for adults who plan to get a credit card, apply for a job, buy a home, use public services, or do many other activities. You are entitled to receive free copies of your credit report from each of the three major credit bureaus once every 12 months. Both the credit agency and the company that provided the information to a credit agency must correct information that is incorrect or incomplete in their report.

Make sure you don't do anything that could cause credit bureaus to think that your disputes over your credit report are frivolous. If that happens, the credit agency must notify you, in writing, that the item has been re-included in your credit report. Completing a dispute over a credit report by mail takes longer, but it provides you with the paper record you'll need if the credit agency doesn't respond in time. You can then request that the credit agency send a notice of correction to any company that has accessed your credit report in the past six months. Thanks to that provision of the Fair Credit Reporting Act, you have the right to challenge errors to have them removed from your credit report.

To challenge online or over the phone, you must have requested a copy of your credit report within the past month and you'll need to provide your credit report number to prove it. Collection accounts, like most negative credit report entries, can remain on your credit reports for up to seven years from the date your account first went into default with the original creditor. It's important for the credit agency to know exactly what your request is about, so be very careful and make sure that the information you cite here matches the description on the challenge form on your credit report. Credit bureaus have 30 days to investigate and respond to your dispute over your credit report, or 45 days if you submit additional evidence during the investigation period.