Can disputing credit report errors help your credit score?

Do you think that the credit score is all about how much money you owe? Think again. Your credit report has a lot more to do with your financial health than just your debt. It’s important to know what’s on it and even more important to make sure that everything listed is accurate. Disputing an error on one of your credit reports can help your score in two ways; correcting the error and showing future creditors that you’re proactive about fixing things. 

Why should I care if there are errors on my credit report?

Many consumers are surprised when they find an error in their credit report. However, these errors may be costly. Incorrect information can affect your ability to get a mortgage and affect the interest you pay on big purchases. An error doesn’t have to be significant–not paying a bill on time or being 30 days late on a payment can still appear on your credit report, even if it doesn’t affect your credit score very much. The impact of errors can be significant. For example, a mistake on your credit report could affect the cost and how long it takes to purchase a home, get a loan, or the percentage of your interest rate.
Your credit history is only one factor that makes up your credit score. Since most creditors use credit histories to help determine whether they will make a loan and at what interest rate, errors could mean the difference between getting a prime rate or an undesirable one. In addition, if your score declines due to inaccurate information, it could keep you from buying or leasing a car or home, renting an apartment, or even getting a job.

Disputing Errors

Many individuals neglect their rights when dealing with financial corporations that hold information on their credit scores. By disputing credit report errors, you are taking the first step to getting them fixed. By disputing errors, consumers can communicate with creditors and remove inaccurate information from their credit history before these untrue statements adversely impact them.
The major credit-reporting agencies are Equifax, Experian, and TransUnion. To begin disputing errors on a credit report, consumers can contact each reporting agency either with a letter, a phone call, or online. It is helpful for consumers to keep copies of everything related to their dispute or any other personal information included in their credit files.
If you have found an error on your credit report, you can contact the organization that provided that information to have it corrected. Explain which specific items from your credit report are incorrect and why you believe they are inaccurate. Provide supporting evidence that you have authorized someone to contact the agency on your behalf if you have an attorney or a valid power of attorney. 

If a company receives a dispute from a consumer, they will then research their database to find the correct information. Once the agency has this information, they will either deny or accept the claim. If a creditor misreported late fees, the creditor should fix this information rather than reporting agencies.  If accepted, within 15 days, the old inaccurate information should be removed, and a record of the correction made by each credit bureau. The consumer may also receive written documentation from all three credit agencies.
If denied, the case goes to an external organization for resolution, which could take  30-45 days to complete its investigation. Although it can be time-consuming to bring these errors to light and correct them, disputing credit errors can help you avoid identity theft and financial loss.
When you dispute a transaction with your credit card company within the acceptable time frame and still have no success, there are other steps you can take. For example, you can contact the Federal Trade Commission (FTC) or file a complaint online. The FTC can not resolve individual complaints, but they investigate significant cases, and their work can help your case and many others with similar issues. These tips can simplify disputing credit report errors to improve your credit score:

• Ensure you have the necessary information to support your claim.
• Keep good records of what has already occurred, including the date and time of phone calls, responses promised by agents, and interactions.
• Be truthful; lying about evidence or withholding evidence can result in more financial damage than good.
• Be understanding when speaking with credit agency representatives who are dealing with multiple cases at one time.
• Use letters rather than confrontational conversations whenever possible – this strategy almost always yields better results.
• Save all supporting documents related to your cases, like faxes and emails.
• Do not give up. It may take time, but keeping your focus on correcting errors will yield positive results with your credit score.

If you find an error on your credit report, dispute it with the credit bureau that issued the report. Disputes are most effective when supporting documentation such as a copy of the original bill or an account statement showing no balance due is presented. Credit bureaus must investigate disputes and correct reports accordingly if there is evidence to support claims made by consumers. By successfully disputing errors and improving your credit score, you can make your life goals more accessible. Good credit provides you with better access to loans, mortgages, and financial products. You may think you can’t repair your credit, but disputing errors on your credit report can help restore your credit score and improve your rating in the future.
The first step to identifying and disputing errors in your credit report begins with regular credit monitoring. Checking your credit report regularly helps identify mistakes before they become problems, and it is made easy with tools like ImportantScore. Visit ImportantScore to get a free Experian credit report and FICO score.