If you’re trying to improve your credit, this advice might be just what you need.
- You have the legal right to challenge items on your credit report that you believe are inaccurate.
- Removing errors from your credit history in this way could increase your credit score.
For the most part, increasing your credit score is a bit of a hassle. If you follow good credit habits, like paying on time and not overcharging your credit cards, you’ll make steady progress. Even so, it will normally take at least six months to a year to see a big difference.
There’s nothing wrong with that, because a higher credit score is worth it no matter how long it takes. But depending on what’s holding your credit back, you might be able to increase your score faster – much faster than expected. A friend of mine recently tried a simple tip and her score went up over 100 points in just a few weeks.
Dispute, dispute, dispute
My friend had a low credit score in the 540 range because she had made some of the typical credit mistakes when she was younger. She had credit cards and other credit accounts, and she was late paying several times. There were also accounts she couldn’t pay, so they were sent to collection agencies.
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Years later, his credit report still felt the brunt of those problems. She had several delinquent accounts on her credit file, and while some of them were legitimate, there were others that she didn’t recognize or should have dropped because of the passage of time. .
What often happens in these situations is that your debt is bought and sold by various collection agencies. This can lead to mistakes, like a debt collector continuing to flag an overdue account even after it should have disappeared from your credit history. For example, in a survey last year, 34% of consumers found errors in credit reports.
My advice was to challenge anything that she didn’t recognize or that should have already come out of her credit. She did, and within weeks many of those black marks had been removed from her credit report. The result? His credit score was now above 650.
How Credit Report Disputes Work
A dispute is a way to have incorrect items removed from your credit file. You can dispute any account information that you believe is inaccurate. Here’s how the dispute process works:
- You file a dispute with the credit bureau that issued the credit report. If all three credit bureaus have the same inaccurate information, you can file a dispute with each of them.
- The credit bureau contacts the creditor who reported the information you dispute.
- The creditor must investigate your claim within 30 days. This period can be extended up to 45 days if you provide additional information relevant to the investigation during the first 30 days.
The creditor may not respond at all, which is fine for you, because it means the credit bureau has to remove the item from your report. If the creditor finds that the information is inaccurate, he is required to provide accurate information to the credit bureaus.
If the creditor provides documents to verify what they said, this item remains in your credit file. However, you can escalate the dispute by providing additional information if you still believe it is incorrect.
The good thing about the dispute resolution process is that there really is no downside, regardless of the outcome. If you win, the item is removed from your credit report, which may increase your credit score. The worst case scenario is that your dispute is unsuccessful, in which case your credit report will be the same as before the dispute.
Correct errors on your credit
It is widely recommended that consumers check their credit report at least once a year. You are legally entitled to a free annual credit report from each of the three credit bureaus (Equifax, Experian and TransUnion). Currently, there are even free weekly credit reports.
If you see possible errors, contact the creditor to learn more or go ahead and dispute it with the credit bureau. Previously, you had to do this by mail, but all credit bureaus now offer online dispute options. Here are the links you can use for each:
Negative items can have a huge impact on your credit score, and you certainly don’t want your score to drop lower than it should be due to inaccuracies. Be sure to check your credit report regularly so you can challenge anything that doesn’t seem right.
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