A credit report is an important financial document containing essential borrowing history details. It includes information like loan repayment, credit card repayment, and other lines of credit. It records whether you have missed, delayed, or defaulted your payments. It also includes the number of credit inquiries, where you applied for credit and the lenders generated a ‘hard inquiry’ request to check your credit report.
Credit bureaus like CIBIL, Experian, etc. manage and maintain credit reports. Though the reports usually contain all the correct details, sometimes there may be errors. Anomalies usually happen when lenders fail to update the new status of the borrower’s credit line, and the report shows the old record. Correcting the error is important to maintaining a healthy credit report and a good credit score.
How to Check for Errors in the Credit Report?
According to a Consumer Reports analysis, from 2021 to 2023, incorrect credit reports were one of the top complaints in the Consumer Financial Protection Bureau. In America, one in five consumers have errors on their credit reports. According to an FTC study, 5% of consumers have serious errors resulting in less favorable loan terms.
It is imperative to identify errors and dispute credit report. Here is how you can do it:
1. Obtain your Credit Report
You are entitled to a free credit report every year. You can request one through their website or mobile app. DueFactory can provide your credit report for free.
2. Check the Details Carefully
Now that you have your credit report, you must carefully review all the details. Check your details and spot any typos or discrepancies in your name, address, PAN number, date of birth, etc. Also, check your account information, including credit account numbers, account types, payment history, outstanding balances, etc.
You should also find whether there are any duplicate accounts or accounts listed twice. Be vigilant if there are accounts listed in your name that you don’t recognize. Also, check whether your closed accounts are marked correctly and don’t include any ongoing activity.
3. Dispute The Errors
After checking all the details, if you find any errors, it is important to consider credit bureau dispute.
How to Dispute the Error?
After identifying the error, here is what you need to do:
Step 1: State the Error
Each credit bureau website has a link to raise disputes. The first step in disputing a credit report error is to highlight it to the credit bureau. Ensure that you write clearly where and what the error is in the report.
Step 2: Gather and Submit Evidence
Collect essential documents that support your claim. You can gather bank statements, loan agreements, closure letters, etc. You need to submit the same to the credit bureau along with the written application or form that there is an error/error in the credit report. Depending on the error, you might have to support your case with the following documents:
- Income statement
- Credit card statements
- Loan documents
- Bank statements
- Birth or death certificates
- Divorce decree
- FIR reports if there is an identity theft.
- Proof of identity
- PAN/Aadhar number
- Address proof or Utility bill
Step 3: Choose Your Dispute Method
One of the ways to credit score dispute is by visiting the credit bureau website. This is a more convenient and quick method of raising the complaint. Here is how to dispute errors online:
- Visit the credit bureau website
- Enter your ID and password and log in to your account.
- Go to the “Credit Report” section.
- Click on “Dispute Error/Resolution.”
- Select the information that contains the error.
- Explain the error.
- Attach the supporting documents.
- Submit the dispute request
- Track the progress online.
Online contact forms are also available on the credit bureau website, where you help dispute credit report. You can email the credit bureau mentioning the error and attaching the documents.
Another option is to submit a dispute form to the credit bureau’s address offline. You can also contact the credit bureau’s customer care.
One of the most hassle-free ways to dispute your credit report is by visiting duefactory.com. We can correct your report and support your credit-building journey.
Step 4: Wait for the Correction
The credit bureau will now investigate the dispute. To do so, they will contact the lender or credit card company and verify with them. They might forward copies of relevant documents to the lender and ask them to send the updated results back. The lender will make corrections and notify the credit bureau. Then, the credit reporting companies will update your credit report.
Step 5: Check the Updated Status
After sending the dispute credit report request, you must wait for some time for the credit bureau to note the error and update the correct status on your report. You can check whether the error has been rectified after 30 days. Ensure that you maintain copies of all communication with the credit bureau for future reference.
Why is it Essential to Dispute Errors in the Credit Report?
Know why it is vital to dispute credit bureau:
1. Maintain Healthy Credit
It is critical to dispute errors and ensure an accurate credit report. It will help you maintain healthy credit habits and take control of your financial future.
2. Good Credit Score
Incorrect information, such as late payments or more outstanding balances, can upset your credit score and bring it down significantly. Keeping your credit report error-free will ensure a good credit score.
3. Securing Loans in the Future
A clean and correct credit report is the key to securing a loan in the future. Due to the inaccurate information mentioned in the report, you can face loan application rejections. It will hinder your ability to apply for credit when needed.
4. Lower Interest Rates
Due to an incorrect credit report and poor credit score, you might have to pay higher interest rates on loans, increasing your overall loan cost. On the other hand, when your credit report is correct and your score is high, you will be charged lower interest rates.
Wrapping Up
Errors in your credit reports can lower your credit score, affect your chances of getting a loan, and raise the interest amount, too. Disputing credit report errors is vital. Don’t stop yourself from disputing any errors you find, big or small! Though it may take time to get the resolution, you must keep your patience and wait for the updated status. If you are not sure about the process or need any help, consider consulting DueFactory.
Disclaimer: This article provides a general guide to the subject matter. You should seek specialist advice about your specific circumstances.
FAQs
1. What are the most common errors in the credit report?
Ans. The most common yet concerning errors include wrong account status, old negative information not getting removed, ex-spouse incorrectly listed, wrong account number, false credit limit, wrong loan balance, unidentified accounts in your name, etc.
2. Is it difficult to dispute the credit report error?
Ans. No. You can get the error from your credit report corrected in easy steps. Though it may take time, the process is not tedious.
3. Does it cost to get the error in my credit report corrected?
Ans. No. The credit bureaus correct the error for free.
4. How can I dispute an error in my credit report?
Ans. Firstly, state the error clearly. Then, attach the supporting documents that support your claim. Finally, raise the dispute by visiting their website, emailing, contacting customer care, or filling out the form.
5. What documents are needed while disputing an error?
Ans. Depending on the error, you might have to submit a bank statement, Credit card or loan statement, ID and address proof, birth or death certificate, divorce decree, PAN or Aadhar number, etc.
6. Can disputing bring your credit score down?
Ans. Filing a dispute does not lower your score. However, if any negative information on your credit reports changes after the dispute, your score might go up.