How to dispute an error on your credit report

It's an unfortunate reality that many consumer credit reports contain errors. Here's what to do if you discover an error on your credit report:

Write a letter to the credit reporting agency explaining what information you believe is inaccurate

When the credit reporting agency gets your letter, they must conduct an investigation and remove any information that cannot be confirmed as accurate. The CRA is required to send the furnisher (the business providing the information on the report) all of the information that you provide. Your letter should contain the following:

• (a) Your full name and address. You may also consider including your social security number to ensure that the CRA locates your file.

• (b) Identification of every single item that you believe is inaccurate. One way to do this is to include a copy of your credit report and circle each of the items you dispute.

• (c) An explanation of why each disputed item is incorrect. Be detailed and describe your dispute as if you were explaining it to a young child. CRAs may disregard your dispute if it isn't sufficiently detailed.

• (d) Attach copies of all of the proof that you have that supports your dispute.

• (e) Tell the CRA if you have previously disputed these items, provide the details of these prior disputes (including any phone disputes), and explain how the CRA's failure to correct the errors is harming you.

• (f) Most importantly, tell the CRA what you want them to do (ie. delete the incorrect entry; modify it, etc).

Mail the letter certified, return receipt requested, and keep a copy of the letter and green card for your records

Address the letter to the credit reporting agency whose report contains the error. Some experts advise sending a copy of the dispute letter to the furnisher. This isn't a bad idea, but you're not required to do so. The CRA is required to send the furnisher all the information that you provide them with.

You may have to write several dispute letters

The CRA may not fix the error after your first letter. Be persistent and write follow-up dispute letters until you get the mistake fixed. Avoid the shortcut of just sending the CRA another copy of your first dispute letter. Read their response to your previous dispute letter and do your best to address the reasons they denied your dispute in your follow-up letter. Don't be afraid to detail your previous attempts to fix the error and to describe the harm the CRA's failure to correct the mistake has caused you in these follow-up letters. And be sure to keep copies of all the letters that the CRA sends you in response to your dispute letters.

If you've written multiple letters and the CRA still hasn't fixed the error, it's time to talk to a consumer attorney

If you've followed all these steps and the error hasn't been fixed, contact a consumer attorney with experience handling cases under the Fair Credit Reporting Act.

Finally, a few words of caution

• It's perfectly acceptable for a CRA to report accurate negative information. Don't abuse the dispute process by seeking removal of accurate negative information. Similarly, be very wary of any credit repair "specialist" that promises to improve your credit score by using repeated and shallow dispute letters or similar questionable tactics.

• It's much better to write dispute letters than to dispute over the phone or to use the CRA's internet form. Writing letters creates a paper trail for your records and it allows you to attach proof of your dispute. It's also possible that a CRA's internet dispute form might require you to waive some of your rights when submitting your dispute electronically.

• Avoid using sample dispute letters that you find on the internet. Many of the sample letters you will find on the internet are shallow, deceptive, or even fraudulent. There is no magic language for writing a good dispute letter. Just adequately identify yourself, identify the account you're disputing, and provide a detailed explanation of the error. It's much better to use your own words than to rely on boilerplate language from a possibly untrustworthy source on the internet. If you must look at a form letter before writing your own, there's a sample letter on the Federal Trade Commission web site.

Common credit report errors to look for on your report

Your credit report is becoming increasingly important in our data-driven society. Lenders use it to determine your eligibility and terms for all types of credit. Employers may use it to determine whether to hire you. It's therefore critical to review your credit report on a regular basis to make sure it doesn't contain any incorrect information. Studies have shown that nearly 80% of credit reports contain a mistake of some kind. Here are some of the common credit report errors:

• Incorrect name. Make sure your name is right, especially if your name is relatively common. An incorrect middle name or nickname may be a sign that someone else's information is incorrectly on your report. For example, if your name is Samuel and you sometimes go by Sam, make sure that the name Samantha isn't showing on your report.

• Inaccurate biographical info. Similarly, make sure that the correct social security number and address appears on your report. Most reports will also list previous addresses. Make sure these are accurate too. If an address you never lived at shows up on your report, that's a sign that someone else's info may be on your report.

• Mistaken account status. Review each account to be sure that current accounts are not reported as delinquent and that open accounts aren't showing as closed.

• Duplicate reporting. Make sure that accounts aren't mistakenly listed twice on your credit report. This could lead a lender to believe that you have more debt than you actually do.

• Accounts that aren't yours. Any accounts that don't belong to you should be an immediate red flag. This mistake is often caused when your file is mixed with another person's file. It could also be a sign that someone has stolen your identity and fraudulently opened accounts in your name.

If your credit report contains these, or other mistakes, your next step is to notify the credit reporting agency of the errors and ask it to correct them. This dispute will trigger the agency's duties under the Fair Credit Reporting Act. Normally, credit reporting agencies have 30 days to investigate credit report errors and correct them. Unfortunately, these agencies don't always take consumer disputes seriously and you may have to dispute multiple times to get the mistake corrected. If you've sent multiple disputes and the credit reporting agency still hasn't corrected your credit report error, you may want to consult with an attorney who handles credit reporting issues. An attorney can advise you about your options to get your inaccurate credit report corrected.

Can I remove negative, but accurate, info from my credit report?

Generally, you don't have the right to remove negative accurate information from your credit report. Under the Fair Credit Reporting Act, creditors and credit reporting agencies are free to report negative information about you as long as that information is correct. This accurate, negative information can remain on your credit report for seven years in most cases. An exception to this general rule is when your credit report shows accurate, but negative, information multiple times. For example, let's say you have a delinquent credit card account. After a few months of delinquency, the credit card company sells the account to a debt-buyer. If both the original creditor and debt buyer are reporting that you owe money, that's something you could dispute in good faith. Otherwise, it might look like you owe twice as much as you actually owe.

Beware of any company that promises that it can remove accurate negative information. It's likely a credit repair scam. These scams usually prey on people with poor credit. They demand large, up-front fees and promise to get all negative information removed, even if the info is accurate. They try to game the error dispute process by sending repeated and shallow dispute letters in an effort to overwhelm the credit reporting agency into removing the information by mistake. However, the credit bureaus have caught on and this sort of gamesmanship is no longer successful. Save your money and work to rebuild your credit the right way.

What is a "mixed file" on my credit report?

Unfortunately, many credit reports contain errors. One common type of credit report error is the mixed file. A "mixed file" is a term used to describe a credit report when credit information for one person is placed on the credit report of another person, creating a false description of the person's credit history.  Occasionally, this problem is caused by the "furnisher" of credit information (ie. a bank or credit card company). For example, a bank may incorrectly report that a spouse is responsible for a mortgage loan that was only in his wife's name.

More often, a mixed file is caused by the way credit reporting agencies match data to a consumer's file to create his credit report. Credit reporting agencies get mountains of credit data from creditors and public records. This data is then matched to an individual consumer's credit report through identifying information such as name, address, and social security number. Mixed files occur when the credit reporting agency's computer doesn't correctly match the identifying information in the credit data to the identifying information in the credit report. The credit reporting agencies closely guard their exact matching criteria and process, but it appears that commons reasons for mixed files include:

• Mismatches between generations with the same name (ie. Jr./Sr.)

• People with similar names (ie. Jon Smith / Jonathan Smith)

• People with similar social security numbers

Mixed files are a big problem. According to one study, 44% of consumer complaints to the FTC involved mixed files. It's a particularly serious problem with the other person's accounts are delinquent or in collections. This can torpedo your credit score and lead to debt collection calls for a debt you don't owe. And mixed files are often very difficult to fix because it can be difficult to prove a negative--that the account isn't yours. You may have to submit birth certificates, social security cards, or sworn statements in order to prove an account doesn't belong to you.

If your credit report appears to have been mixed with someone else's, the first step is to write a detailed dispute letter to the credit reporting agency. You may have to follow up with additional information if the credit reporting agency requests more details or documents. Unfortunately, many mixed files are not resolved through the informal dispute process and only a lawsuit can get the credit report cleaned up. If you've disputed your mixed file and haven't gotten it fixed yet, your next step should be to talk to an attorney who is familiar with credit reporting issues and can advise you of your rights under the Fair Credit Reporting Act.