7 Tips to Fix Mistakes in Your Credit Report

I have a client who is currently under contract to buy a home in Birmingham.  They are very excited because after a long search, we have finally found them a home that fits all of their wants and needs.  Except they have a hiccup...they have an error on their credit report.  

Usually there is a long list of things to consider when looking for a new home including the size, number of bedrooms, neighborhood, school district, and more. With all of these things to consider, you may forget to add checking your credit report to your list.  But your credit score and credit report are major factors in the home buying process.  Lenders not only use them to decide whether they should approve your application, but your score directly affects the interest rate you qualify for when applying for the loan. 

My lender is helping my clients work through their credit report issue, but I wanted to share some tips for fixing your credit report, before you decide to make a purchase that requires financing.

1. Do it now.  The longer you put off reporting an error, the harder it’ll be to find the evidence to prove you’re right and they’re wrong.  Plus, you can lose consumer protections if you wait longer than a month to send a written dispute of certain mistakes, like when you get an incorrect debt-collection notice.

2. Don’t assume the mistake you know about is the only mistake in your credit history. About 5% of U.S. consumers have a credit report error in one of their three major credit bureau reports, the Federal Trade Commission says. Find out what each of the three big bureaus is reporting about you by ordering a free credit report.  For credit bureaus, use these websites:

• Equifax 
• Experian 
• TransUnion

3. If your credit report error involves identity theft (you see credit card accounts you didn’t open or loans you didn’t take out), call each of the three credit reporting bureaus and ask them to put a fraud alert on your file. Then, fill out a Federal Trade Commission identity theft report and call the police to report the theft. The FTC and police reports help prove you had your identity stolen.

4. Complain to everyone involved. Write or file an online dispute with the credit reporting company and the business that made the mistake. If the mistake was made by:

• A finance company, like a credit card issuer or mortgage lender: Call and ask what their procedures are for correcting errors.
• Debt collection company: Follow the instructions on the collections notice to formally dispute the debt, which forces the debt collector to verify the debt.

5. If all this complaining does nothing, consider contacting your state attorney general's office to see if they can offer any guidance.

6. Back up your story with proof.  You’ve got to prove your case by sending copies (never trust the credit bureau with the originals!) of the records that show you’re right and the company that made the error is wrong.  Also, set up a file folder where you keep:

• Copies of complaints
• Receipts of certified mail
• Screen prints from online filings
• Notes from phone calls
• A calendar reminding you when you’re supposed to hear back from or respond to companies.

7. If at first you don’t succeed, keep complaining until you do. 

• Ask the credit reporting agency to put a short statement in your credit report saying you disagree with the report.
• File a complaint with the Consumer Financial Protection Bureau. The bureau will look into your error and report back on what it finds. 
• Complain to the Federal Trade Commission 1-877-FTC-HELP (1-877-382-4357).
• Call or write to your state attorney general (that’s who enforces your state credit reporting and debt collection laws).