Most consumers don’t realize that there have more than one credit report. In fact, there are several credit reporting agencies including the top three, Trans Union, Equifax and Experian. There are also several smaller credit reporting companies but these “Big 3” are the most important to keep track of and check on a regular basis.
Speaking of checking, you should do that at least once a year by ordering your credit report from all three. Federal law gets you a free report from each of them once a year, so you should definitely take advantage of it. When you do, and you find an error, there’s a system that needs to be followed in order to get that error taken care of.
By the way, errors are more common than you might think. It’s possible that a delayed payments to your electric energy provider was mistakenly sent to collections, or many of a wide number of other mistakes. Regardless of how the mistake was made, it’s vitally important that you have it erased from your credit reports so that, down the line, you don’t face any problems when applying for future credit like a mortgage, automobile loan or any other situation where you need credit (and you don’t want to pay higher interest rates).
One caveat is that, if you have truly excellent credit (which would be a score of 760 or better) and the mistake or error is minor, you might want to skip the disputing process because it’s actually involved, and might be rather stressful.
Your first step is to go to the website of the particular credit agency where the mistake was found. You’ll need the credit report for that, and the number from that report, and should start your dispute within 30 days. Once that’s done, the agency will send your dispute to the lender, credit card, bank or collection agency that’s caused it, in order to check for accuracy. They have from 30 to 45 days to get back to you.
Hopefully the lender will admit that they made an error and make the right move to either modify that error or remove it completely. If that doesn’t happen however, your next step is to go directly to the lender with your dispute. They also have 30 days time in which they can investigate your claim and, while that investigation is ongoing, they need to show in your credit file that the particular item you’re disputing is indeed in dispute.
If they find that you’re correct, and they have made a mistake, they are required by law to report to all of the credit bureaus that the mistake was made, and also correct it.
In rare instances where you are 100% sure that a mistake has been made the lender might still say that it hasn’t. In this case you can ask to have a permanent narrative written into your credit report saying that you, as the customer, dispute that particular error. If you have problems when applying for future credit, you can point to this dispute and explain what happened more clearly.