When it’s Wrong, Make it Right: Disputing Credit Report Errors
KEY TAKEAWAYS
✔ Mistakes on your credit report can be fixed when you know how to find them.
✔ You can dispute a credit report mistake online for free.
✔ Checking your credit report on a regular basis can help you spot potential errors sooner.
Here’s something that happens from time to time—a person gets turned down for a loan, or they can’t rent an apartment because of a low credit score. They assume there is nothing they can do about it so they start applying for loans somewhere else.
If this sounds familiar, you need to know how to check your credit score, make sure it’s accurate and report any errors. It won’t take long and it could result in a higher score that gives you easier access to credit at better interest rates.
Finding the Error
Canada’s biggest credit reporting bureaus are TransUnion and Equifax. You can go to their websites and look at your confidential credit score for free. So why not?
Here’s what to look for:
1. Personal information: Check that your date of birth and address are correct because someone else’s credit information may end up on your report if you share a common name. Be sure to double-check the spelling of your full name and that your phone number and social insurance number are accurate.
2. Payment history: Check all the details of every account listed to ensure your payment history is accurate. Maybe you’ve been paying a bill on time but the report shows you have overdue payments.
3. Old information: Check the number of years the report covers. The maximum number of years taken into consideration on a report is usually six, depending on the credit bureau. If, for example, you had an outstanding bill sent to a debt collector nine years ago or the debt was paid, it should not appear on your credit report. Contact the credit bureau directly to get the old information removed from your report.
4. Accounts you never opened: Check for credit inquiries, credit cards, lines of credit, loans or other accounts that you did not authorize. It may be a sign of potential fraud or attempted identity theft.
Disputing the Error
Step 1: Gather the facts
The key to successfully disputing an error, whether through creditors or the credit bureau directly, is evidence. Gather copies of receipts, bank statements, credit card bills and other financial information that supports your case. Errors relating to a change in name or address simply require verification with a marriage certificate or a piece of mail addressed to you, for example.
Step 2: Contact the creditor
Dealing directly with a creditor, instead of a credit bureau, can sometimes resolve an issue faster. It may take less time for the creditor to update the credit bureaus and correct the error versus the credit bureau launching a full-scale investigation, which can take about three weeks.
Step 3: Contact the credit bureaus
The TransUnion and Equifax websites show you how to dispute credit report errors by phone, mail or online forms and what details to provide, such as the company name of the creditor related to the error and the reason for the dispute. If you suspect fraud on a certain account, you can contact the police and ask the credit bureau to put what is called a “fraud alert” on the account. This helps to legitimize your dispute.
Step 4: Add a consumer statement to your report
In an ideal scenario, your dispute results in the credit bureau correcting your credit report after the creditor agrees there was an error. But what if your report is unchanged and you’re not happy with the investigation? In this case, you can add a statement to your credit report, explaining the error you've disputed and that you have documented proof to support your case. There is no cost to add a statement.
Check your credit report regularly
Once a year, you can obtain a free copy of your credit report by mail from TransUnion and Equifax, and online copies are also available, for a fee. By ordering a copy from TransUnion in January and one from Equifax in June, for example, you can check your credit report every six months. The sooner you see something that seems wrong, the sooner you can make it right!
Disclaimer: This content is intended for informational purposes only and does not constitute financial advice on any subject matter.