First Person: How to Dispute a Mistake on Your Credit Report

The modern world of doing business by credit and the ease with which credit grantors can access your personal financial information means your credit report and related credit score are your public profile. If they are not as positive and error-free as possible, your personal finances will be impacted negatively.

A key part of successful personal finance management is monitoring your credit report and quickly remove any errors that may appear. With even a minor negative entry, you can find yourself paying higher interest rates, having trouble purchasing a home or a car, or even have trouble getting a job or obtaining insurance. All these things involve a review of your credit report and/or score.

We went through this situation personally very recently. My son had a minor problem with AT&T. When he ordered their Uverse DSL home service they had problems with his self-installation order and created two accounts for him. Although he continues to be an AT&T customer, the second account they created was never properly deleted, and the second modem sent to him as part of the self-install kit was not properly credited, even though he returned it via their official packaging. AT&T kept assuring him it was handled, yet this small $80 debt (the cost of the "missing" modem) went to AT&T's collection agency and appeared on his credit report, his only negative entry in 20 years. He went through the dispute process, tracking all correspondence with certified letters, return receipt requested and after about two months the entry has been completely removed from his credit reports.

Here's a basic guide of how to remove an error from your credit report:

Collection Notice
Normally the first process in a negative entry appearing on your credit report will be a collection notice. As soon as you get a notice from a debt collector, send them a written dispute. Do not ignore it, do not call them. You must respond within 30 days of receiving the letter to protect your rights. If the debt is legitimate, consider paying the original creditor immediately in full and disputing the debt with the collection agency, this should stop any appearance of the debt on your credit report.

Dispute Letter
Keep it basic and to the point. Include your personal information and reference their account numbers and any other data on the collection letter. It's good to reference you are disputing the item "pursuant to your rights under the Fair Credit Reporting Act" the Federal law which gives you the rights in this process.

Anything you send to anyone during the dispute process, keep a copy of the letter. Send it via USPS First Class mail, certified mail, return receipt requested. The letter will cost about $5.50 to send. This guarantees you delivery and you will fill in a small card with your return address, when the recipient gets the letter, they must sign for it, the card is then returned to you, providing signed, dated legal proof of delivery.

Credit Bureau
If the process continues and the collection agency ignores or denies your dispute, you will need to contact the credit bureaus to dispute the item and have it removed from your report. If you get a letter from a collection agency and you do not respond within 30 days, the item will appear on your credit report. You don't give up your rights and can still dispute the item at a later time.

You cannot dispute anything on your credit report without first requesting an official copy, which is easy to do. You can go to the US Government's official site or you can send letters to the individual bureaus (Experian, TransUnion and Equifax). Be warned, after receiving the report, you will see big printed information about disputing items via phone or the web. Do not dispute items by phone or online, you do not have the same rights as when you do it by letter.

Once you dispute the item, the agency has 30 days to investigate your complaint. They need to contact the creditor and verify whatever your dispute was. If they cannot confirm the accuracy of the debt within this time, they must remove it from your credit record.

Debts
If you have a real, correct debt, there is not a good, legal way to remove it. And if we are going to have faith in this system, that's a good thing. You do have the right to add a note, if there is information about the debt you feel credit grantors should know.

If you have a debt and want to settle it with the creditor or debt collector, and they make an offer to settle the debt in full, without exception, you must demand a written letter from them confirming this arrangement. Keep in mind, in most cases, creditors or debt collectors cannot delete a paid account, as it is not in error. They can indicate the account is paid in full, which will be better than leaving it showing unpaid.

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