Credit Report Dispute Process

A drastic rise in the use of credit and debt services namely all types of loans, credit and debit cards have led to the introduction of the systems of credit worthiness or rather credit report and reporting. The system is simple, you borrow a loan or a credit card, use the money and return it with interest. The lender, bank and the credit card company report the details of all your borrowings and repayments to a company known as a credit reporting agency. Some important information may include, the date of payment, the defaults, late payments, the volume of borrowings, etc. The agency puts together the information in your file, which is known as a credit history and then rates it, which is known as a credit rating with the help of a mathematical formula, which gives the output, which is known as a credit score. This information is enclosed in a file which is termed as a credit report. Now in the entire process things may go wrong and your credit report will appear wrong. Apart from the financial information that is written in there, the credit report also has several other personal details such as residential address contact information or even the income. If any information goes wrong, you are empowered by law to initiate a process to dispute the credit report.

Now one might question the need for initiating a dispute process. The answer is that many people, including your lenders, employer, insurance agent, clients can lawfully access this report. The world judges your ability to handle money and finances and your financial status, with the help of this report. A mistake in the report is a tarnish on your personality.

How to Dispute a Credit Report Error

The credit report dispute process is a fairly simple one and can be initiated by any person. Actually, it is the right of every person who has a credit report, to initiate a credit report dispute in case of a mistake.

There are no steps or procedures that are involved in the disputing process. If you are asking the question, 'how to file a credit report dispute' then there is just one step that you will have to take up, write a letter. This letter is known as a credit report dispute letter and it is fairly easy to write such a letter. All you will have to do is to get your credit reports from all the prominent credit rating agencies, namely, Experian, TransUnion and Equifax. Then get all your bank statements and the statements from your lenders and credit card companies. Here is where you start auditing the statements. That is check all installments, bills payment entries and the simultaneously keep on checking the (wrong) credit report. By patiently checking the three documents, you shall be able to spot that mistake. Make copies of the statements that show the mistake and mail the letter to agency or agencies.

What happens when you file a credit report dispute is that the agency launches an inquiry and starts to verify its own data, and data that is provided by the lenders and the credit card companies. After the mistake is spotted, the agency corrects the report and reapplies that mathematical formula on the new data. A corrected copy of the report is sent to you.

To simplify this procedure and to keep the report error free, keep soft and hard copies of all your accounts and financial statements with you. Keep a hand written record of all your repayments, dates and even your credit card bills. It is also recommended that you check your credit report at least once a year, as the report and the credit score, influences your rate of interest.