How to Dispute Items on a Credit Report

October 25, 2008

Many consumers have inaccurate entries or items on their credit reports. But, it can sometimes be difficult to determine who is responsible for the error.

Companies you have accounts with often report your payment history to the credit bureaus. When they report this information, they are called “subscribers.”

The credit bureaus gather information from all of your creditors and put together your credit report. Bureaus then sell your credit report to creditors who order it. Consumers can also order copies of their own credit reports.

Sometimes subscribers report inaccurate information to the bureaus. But, sometimes credit bureaus make errors when they gather, store, and / or re-report the information.

Consequently, it is very important to dispute inaccurate items on your credit report with BOTH THE CREDITOR AND THE CREDIT BUREAUS.

There is another reason for doing so: many consumer protections are triggered by routing your dispute through the bureaus.

Once a consumer has alerted the bureaus to investigate an inaccurate item, the creditor and the credit bureaus are held to a standard of using “reasonable procedures” in investigating and correcting any disputed information.

This standard can become important if a consumer later needs to take legal action to force and uncooperative party to correct an inaccurate item.

When disputing an item on your credit report, first write a letter to the creditor describing your dispute.

Then, write a letter to each bureau explaining your dispute. THIS STEP IS CRITICAL.

Once the bureau receives your dispute, it is supposed to contact the creditor to (1) notify the creditor of your dispute and (2) attempt to verify the dispute information.

If you have previously notified the creditor of your dispute, the creditor in theory should investigate the dispute before verifying any information to the bureaus. Unfortunately, this rarely happens in practice.

But, documenting a creditor’s failure to investigate before verifying an inaccurate item to the bureaus can be very important if the consumer needs to take further legal action to get the inaccurate item corrected.

For sample dispute letters, click here.