This post is sponsored by Lexington Law.
According to the Consumer Financial Protection Bureau, 76% of consumers who filed credit reporting complaints said that they had incorrect information on them. What does this mean for you? There’s a good chance that your credit report has errors!
These unfair negative items can lead to higher interest rates, prevent you from getting a mortgage, buying a car, getting a security clearance, or even landing a job. This means longer term loans and thousands of extra dollars out of your hard-earned paycheck. And let’s not forget, being turned down for your dream job that you worked hard to get.
So, what can you do to make sure your credit report is accurate and remove any false items? Just follow these steps:
Step 1: Pull your credit report
Before you do anything, you want to pull your credit report and thoroughly check for accuracy. Your credit report is above and beyond your score and gives details on how they get to this number. You can get a free annual credit report here.
Step 2: Review for inaccuracies
Thoroughly look through your report and check for these common error areas:
- Account information: There is a possibility that you will see accounts on your report that aren’t yours. This tends to happen because people have similar names and their information is inaccurately listed on your report. You might also see incorrect details about your accounts. For example, if you’re an authorized user on your parents account, you might be incorrectly listed as an owner or you closed an account that is listed as open or there is a wrong balance noted. Thoroughly review account information to make sure what is showing is not only yours but is accurate.
- Personal details: Credit reports have your personal information listed (name, current and previous addresses, social security number, and birth date) and have an “alias” section. This section lists previous names (including maiden name) and middle initials. Make sure these details are accurate.
- Fraudulent accounts: This one is major and can really impact your credit score. Spend time and look through all of your credit accounts and your loans and make sure they are yours. Check the details of the lender, your balance, and status information. You want to make sure that you were the one to open these accounts and there is nothing suspicious listed.
If you don’t find errors now, great! Just make sure you pull your report annually and keep on top of it. If you find inaccuracies, follow the next steps.
Step 3: Send a letter to the credit reporting company.
Start by sending a letter to the bureau through certified mail with return receipt requested and keep a copy for yourself. Try using this FTC template and enclose a copy of your report with the items in question circled.
This process usually takes about 30 days to hear back and even longer for the investigation to take place. When the investigation is complete they will notify you in writing and send an updated copy of your accurate report.
Step 4: Send a letter to the company/organization/person who provides the information about you to a credit reporting company.
Use this sample letter and include copies of the documents that support your claim. This letter just makes them aware that you disputed an item on your report. If the claim is approved, they must tell the credit reporting company to update your information.
Step 5: Review the resolution.
You should hear within 30 days that an investigation has started and it will take a few more weeks to complete the process (usually within 60 days). Review the resolution and make sure it is accurate and corrected on your report. If it’s not approved, you can:
- File a complaint against the agency with the FTC
- Redispute the error
- Go straight to your creditor
Step 6: Follow up and repeat, if necessary.
Make sure you’re keeping an eye on your reports and follow the process again if something pops up. Lexington Law suggests pulling your report annually so you’re always up-to-date and can catch errors immediately.
I’ll admit, these steps are tricky to do on your own and involve a lot of work, detail, and patience on your part. Many people opt to use a company like Lexington Law to navigate the process. Lexington Law uses three steps and does everything from pulling your report to helping you repair it to continually monitoring it and helping you invest in your future. If you’re looking for support and want to know what others are saying about Lexington Law, you can read reviews here.