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How to Dispute Credit Report Errors

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Imagine for a moment how you would feel after doing all the hard work of saving for a down payment, researching and putting an offer on a new home, only to be turned down by a mortgage lender due to an error on your credit report that you weren’t responsible for and didn’t know about.

It happens more often than you think. With all the information gathered by the big three credit reporting agencies (Equifax, Experian and TransUnion), including your name (and variations thereof), Social Security Number, date of birth, public records, plus credit account information from current and past loans and credit cards, errors are bound to happen.

That’s why it’s important to review your credit reports at least once a year, and most certainly before you seek a new loan or line of credit. And if you do find legitimate errors, knowing how to get them fixed can help alleviate future problems down the road.

How to check your credit report for errors

Your credit reports are maintained by each of the three national credit bureaus: Experian, Equifax and TransUnion.

The information they contain is sold to lenders, employers, insurers and other businesses that review consumer creditworthiness. They show how much money you owe on your credit cards and the balances on any auto, student or mortgage loans you might carry. They also list any financial mistakes you’ve made in the recent past, — everything from missed and late credit card payments to bankruptcy declarations and foreclosures.

The information contained in your credit reports is fed into an algorithm that makes up your three-digit credit score, the number lenders use to determine if they’ll lend you money and at what interest rate. A higher score means you’re more likely to qualify for the best credit cards and loans at lower interest rates.

That’s why it’s so important to make sure that the information on your credit reports is accurate. A single mistake on these reports could send your credit score tumbling — and errors aren’t as uncommon as you might think, such as name mix-ups and transposed numbers on your SSN.

A study by the Federal Trade Commission found that one in four consumers found a credit report error that could have affected their credit scores. That same study also revealed that more than one in 10 consumers who corrected these mistakes saw a change to their credit scores.

Fortunately, it isn’t hard to dispute and correct a mistake on your credit reports. And doing so could help you improve your credit score, but know that only legitimate errors can be corrected. That means you generally can’t remove a late payment you made, but you can dispute things like an account you never opened.

But once you get your reports, how do you check them for errors? The key is to figure how credit reports are organized and what information they contain.

Your credit reports start with a list of personal information, including items such as:

  • Your full name
  • Current and recent addresses
  • Telephone number
  • Social Security number
  • Date of birth
  • Spouse’s name
  • Current and recent employers

Reports also contain a section for three types of public records: bankruptcies, tax liens and civil judgments. (Credit reports won’t list arrests, misdemeanors or other non-financial records.)

Maybe you failed to pay a tax bill. Your credit report would list the amount of the unpaid taxes and the filing date of a tax lien against you. If you’ve recently declared bankruptcy, your report will list the type of bankruptcy you’ve filed, the filing date of your bankruptcy and the court in which you filed.

You don’t want public records listed on your reports; these will cause your credit score to tumble. Fortunately, these records don’t stay on your reports forever: foreclosures and Chapter 13 bankruptcies fall off your credit report seven years after their filing dates, while Chapter 7 bankruptcies disappear from your report after 10 years.

Another important part of your credit reports is the accounts section. This section lists your credit card accounts and balances, and the balances of installment loans like auto and mortgage loans. Your report will list these accounts as either open, negative or closed.

For instance, your credit reports will list a mortgage loan that you are still paying off as open, including the loan’s current balance, the date you took out the loan and the lender behind the loan. Reports will also list whether you have any late or missed payments on this loan and will list whether the loan is open — meaning you are still paying it off; closed — you’ve finishing paying off the mortgage; or in foreclosure.

This section will list open credit card accounts, too, listing your current balance, the highest your balance has ever been and whether you are late on your payments.

If you are interested in a sample credit report, credit bureau Experian has a good example here.

Common credit report errors

Certain errors are more likely to pop up in credit reports. The Consumer Financial Protection Bureau warns consumers to look for:

  • Errors made in your personal information, including reports that list your name incorrectly or contain an incorrect address or phone number.
  • Closed credit card accounts that are still listed as open.
  • Credit card or installment loan payments reported as late, even if you paid them on time.
  • Debt that is listed on your report more than once, possibly with different names for each listing.
  • Reports might say you owe more on your credit cards than you actually do.
  • Reports might list credit limits on your accounts that are too low.
  • Accounts that aren’t yours that may have been opened fraudulently.

If you spot any of these errors, make sure to correct them. All of them could impact your credit score.

Where to dispute credit report errors

You can report credit report errors online — however, we recommend doing it both in writing and online. If you do not like the outcome of the dispute, a paper trail will be helpful if you want to continue pressing for a change in your credit report. Plus, a written letter, sent by certified mail, can be more effective.

TransUnion

You can dispute with TransUnion at dispute.transunion.com, or contact the bureau by phone at 1-800-916-8800. You can also dispute information on your TransUnion report in writing at TransUnion, LLC, Consumer Dispute Center, P.O. Box 2000, Chester, PA 19016.

Equifax

You can dispute online with Equifax online at equifax.com/personal/disputes/. If you’d prefer to dispute in writing, you can send a letter to Equifax Information Services LLC, P.O. Box 740256, Atlanta, GA 30374-0256. You can also call Equifax at 1-866-349-5191.

Experian

You can dispute online with Experian at www.experian.com/disputes/. You can dispute in writing at P.O. Box 4500, Allen, TX 75013.

How to file a credit report dispute

You might have a mistake on your TransUnion credit report while your reports from Experian and Equifax are error-free. In this case, you’d start an online dispute with TransUnion.

Log onto the bureau’s dispute resolution center — by visiting that credit bureau’s website — and click on the appropriate button to start a new dispute. You may be asked to set up an account with the bureau first. Doing this will bring up a list of options to dispute each piece of information on the report. Once you locate the incorrect information, whether it is a credit account still listed as open even though you’ve closed it or a late payment that you believe is inaccurate, click on the “dispute” option for that item.

You will then have the option to select a reason for your dispute. If you’ve never paid your auto loan late, but Experian reports that you have, you’d be able to explain using a dropdown box that you never paid that bill late.

Once you’ve selected all the items you want to dispute, you’ll be given the option to upload documents that help prove there is a mistake in your report. Take advantage of this: the more information you can provide, the better your chances of winning your dispute. If Equifax lists a late credit card payment from April 2020, attach any documentation that shows you paid your bill on time, such as a bank statement that shows when the payment was made. If TransUnion lists an auto loan as being open even though you’ve paid it off, upload your title paperwork showing that you own the car free and clear.

After you submit your online dispute, the credit bureau will send you alerts by email confirming that an investigation has been launched. The bureau will also send you emails every time there is new information about your dispute and when the investigation has been concluded.

You can also write a letter to the credit bureau if you’d prefer that method to opening a dispute online. Again, you can contact the bureaus using the information listed earlier in this story.

According to the Federal Trade Commission, your letter should include your complete name and address and should clearly identify each item in your report that is incorrect. Include the reasons why an item is incorrect and request that the offending item be removed or corrected.

The commission recommends sending a copy of your credit report with the incorrect items circled or highlighted. You should send this letter by certified mail, with a return receipt requested. This way, you can be certain that the credit bureau will have received your letter.

The Federal Trade Commission also recommends that you contact the institution that provided the credit bureau with the incorrect information. If the bureau reports a missed payment from your mortgage lender and you are disputing this, contact your mortgage lender, too, to inquire about the mistake.

Sample dispute letters for credit bureaus and creditors

Want to send a dispute letter to one of the three credit bureaus? Here is a sample dispute letter provided by the Federal Trade Commission. Just fill in the blanks when you send it.

The Federal Trade Commission recommends that you also send a dispute letter to the company — bank, lender or credit card provider, usually — that send the information you think is incorrect.

Here is a sample letter, provided by the FTC, for that step in the process:

What happens after you submit a dispute

The credit bureaus are required to investigate your dispute and will usually do so within 30 days, according to the Federal Trade Commission. Once you submit your dispute, either online or by writing, the bureau will forward your information to whatever organization provided it with the information in dispute. If you are disputing a late payment by one of your credit card providers, the credit bureau will send your information to that provider.

If the company does find that the information you are disputing is incorrect, it must then notify all three credit bureaus so that they can correct the information in your reports.

Once the investigation concludes, the credit bureau must provide you the results in writing, along with a free copy of your credit report if the dispute ended with a change. The bureau will also send you a written notice that contains the name, address and phone number of the company that provided the incorrect information.

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Is a 700+ credit score good?

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whatisacreditscore

Once your credit score passes the 700 mark, you’ve hit a milestone, but how do you get there?

A credit score over 700 falls into the “good” range, and can open a lot of doors in terms of qualifying for some of the best interest rates for credit cards and loans.

Credit scores help lenders assess your “risk factor” and the higher your score, the more reliable you appear.. The lower your credit score, the more likely lenders think you may default on a loan, make late payments or overextend yourself with borrowed funds..

People with 700+ scores are considered to be “prime” customers who are diligent about paying on time, use far less than 30% of their available credit than what’s extended to them and have at least three to five years of credit history. They also tend to have a good mix of credit and installment loans and don’t apply for new lines of credit on a regular basis.

Understanding the financial behaviors that can bump your credit score over the 700 mark can help you become a member of the “prime” club,

What factors influence a credit score?

There are two primary consumer credit scores, the FICO Score and VantageScore. While both carry a range from 300-850, the FICO Score is used in more than 80% of lending decisions. FICO assigns a weight to these five different factors that are then fed into an algorithm that comprises your credit score:

  • Payment history (35%): This is the single most important factor impacting your credit score. Missed payments can crush your credit score quickly and remain on your credit report for 7 years, although their impact will lessen over time as you make timely payments on all your accounts. Not all late payments are created equally. If you are fewer than 30 days late, your missed payment will likely not be reported to the bureaus (although you may be subject to late fees and a penalty APR). Once you are more than 30 days late, you will be reported to the credit bureaus. The longer you go without paying, the bigger the impact on your score. A single missed payment of 30 days or more can still have a big impact on your score, shaving off anywhere from 60 to 110 points.
  • Amounts owed (30%): The higher your credit card balance is relative to your card’s credit limit negatively impacts your credit score. This is called your credit utilization ratio. High balances can signal that you’re having a hard time keeping on top of your debt load, and the one of the quickest ways to boost your credit score is to lower your balances to less than 30% of your credit limit. For example, if you have a credit card with a $1,000 credit limit, do your best to keep your balance below $300 or, even better, to $0. It’s also important to know that loans do not factor into your credit utilization, just lines of credit such as credit cards.
  • Length of credit history (15%): The longer you’ve been using credit, the better for your credit score. However, this scoring factor is one you have the least control over as it takes time to build up a long credit history. One way to protect your length of credit history is to keep a credit card you’ve had the longest open and active by using it for a small recurring charge every month. FICO looks at the average age of all your accounts, so closing an old account can shorten that average age of accounts.
  • New credit (10%): This looks at how many new accounts you have opened, and how many times you have applied for credit. Each time you apply for a loan or credit card, a lender will conduct a review of your credit reports and scores, known as a hard inquiry. Each hard inquiry can knock your score down a few points for around a year. In general, lenders frown upon opening too many lines of credit in a short period of time as that can illustrate that you’re in financial trouble. To protect against having too many hard inquiries, apply for new credit sparingly.
  • Credit mix (10%): The more types of credit you have, the better. Someone who has successfully managed a car loan, a mortgage and a credit card would score better than someone who has just managed a credit card successfully.

What’s a good score?

The higher your score, the lower the interest rates you can get from banks and lenders. FICO defines a “good” credit score between 661-780, according to credit bureau Experian.

Why you want a score above 700

A credit score above 700 essentially puts you in the “prime” category and opens up opportunities that aren’t available to consumers with lower scores, including:

  • When you buy a home, you should get competitive mortgage interest rates
  • When you buy a car, you may qualify for any 0% financing deals from manufacturers
  • When you apply for a credit card, you may qualify for the best bonus and introductory offers
  • When you apply for auto insurance, you will be considered more responsible – and could get better rates
  • When you apply for a job that requires a credit check, you could easily pass screening

Behaviors that can keep a credit score from rising above 700

There are some common reasons that can keep your credit scores from rising above the 700 mark:

  1. If you’ve never had a credit card or loan, then you typically don’t have enough credit history reporting to the big three credit bureaus (Equifax, Experian and TransUnion) to have established a credit score.
  2. If you’ve been maxing out your credit cards or carrying balances of more than 30% of your credit limits.
  3. You have a history of making late payments or missing payments entirely
  4. Or, you’ve applied for multiple new credit cards or loans in a short period of time.

Check out 6 simple steps for improving your credit score.

How to boost a low credit score

If you’ve struggled with your financial situation, know that by taking simple, actionable steps, such as paying down high balances and paying on time every time, you can begin rebuilding your score and eventually become a “prime” customer.

If you’re new to credit, then begin building your credit score with a student credit card, a store card or a secured card, which all have lower credit score requirements for approval.

Secured cards require you to submit a security deposit of around $200, which then serves as your credit line. Before you apply, make sure the card issuer reports the account and payment activity to all three credit bureaus as each bureau generates its own FICO Score. Use the card responsibly by making small charges to it each month and pay off the entire balance by the statement due date.

Track your credit score progress monthly and once it crests the 700-mark, you should be able to qualify for a better card with a higher credit limit, such as a cashback card or travel rewards card.

To ensure your credit score keeps going in the right direction, always pay at least the minimum payment due on time, and keep your balances well below the credit limit.

Finally, know that your credit score will fluctuate every month by a few points here and there as you borrow and repay, open new lines of credit or pay off loans, but those variations are normal and shouldn’t be a cause for concern as long as your scores are generally trending up instead of down.

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The Best Options for Rebuilding Your Credit Score in 2021

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The Best Options for Rebuilding Your Credit Score

A strong credit score is a vital part of your overall financial health. But rebuilding a damaged (or non-existent) credit score can feel impossible. Don’t despair. There are plenty of avenues you can take in order to rehabilitate your credit score and it all begins with identifying your starting point.

How Bad is Your Bad Credit Score?

Before you start to panic about rehabilitating your bad credit score, let’s determine if it’s even bad. Where do you fall in the range of FICO® credit scores? Below you’ll find what your credit score is considered, with ranges from Experian.

  • Above 740: Excellent Credit
  • 670 – 739: Good Credit
  • 580 – 669: Fair Credit
  • Below 579: Bad Credit or No Credit Score/Thin File

Your credit score isn’t the only thing that will keep you from being approved for credit. These factors are common reasons for being declined.

  • Your debt-to-income ratio is above 50%
  • You have no credit score
  • You have been building up a lot of debt recently
  • You are unemployed

In order to focus on rehabilitating your credit score, you’ll need to start with getting a line of credit. This may sound impossible because you’re constantly getting declined. Fortunately, there are options tailored specifically for people looking to re-establish credit.

Rehabilitating a Bad Credit Score (579 and under)

Get a Secured Card

You’ll use your own money as collateral by putting down a deposit, which is often about $150 – $250. Typically, the amount of your deposit will then be your credit limit. You should make one small purchase each month and then pay it off on time and in full. Once you prove you’re responsible, you may be able to get back your deposit and upgrade to a regular credit card.

Check out two of our favorite secured cards below, and more options for a secured credit card here.

The Discover it® Secured

Perhaps our favorite secured card, the Discover it® Secured, has numerous benefits for those looking to rebound from a bad credit score. There is a $200 minimum security deposit that will become your line of credit, which is typical of secured credit cards.  An additional perk is the rewards program (very rare for secured cards) that offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically. This card has another great feature: Discover will automatically review your account, starting at month eight, to see if your account is eligible to transition to an unsecured card. Discover will decide if you’re eligible based on a variety of credit factors, and if you are, you will receive notification and get your security deposit back.

The Secured Mastercard® from Capital One

The Secured Mastercard® from Capital One is another option for those who want to strengthen their credit score. This card offers a potentially lower minimum security deposit than other cards, starting as low as $49. Be aware the lower deposit is not guaranteed and you may be required to deposit $99 or $200. You can deposit more before your account opens and get a maximum credit limit of $1,000. There is a feature that will assist your transition from a secured to an unsecured card. Capital One automatically reviews your account for on time payments and will inform you if you’re eligible for an upgrade. However, there is no set time period when they will review your account — it depends on several credit activities. If you receive notification that you’re eligible, you will be refunded your security deposit and will receive an unsecured card.

Rebuilding from a Fair Credit Score (580 – 669)

Apply for a Store Credit Card

You might be used to checking out at a store and being asked if you’d like to open a credit card. While these credit cards come with really high interest rates and are great tools to tempt you into buying items you don’t need, there is a big perk to store credit cards: they’re more likely to approve people with low credit scores. Just be sure to only use the card to make one small purchase a month and then pay it off on time and in full. Unsubscribe to emails about deals and don’t even carry it around everyday in your wallet if you can’t resist the desire to spend. Read more here. 

Those unable to get a store credit card should apply for a secured card to build credit. With proper credit behavior, you can see your score rise and then you may qualify for a store card.

Here are our picks for two store credit cards:

The Walmart Rewards Card

Walmart Rewards Card

The information related to Walmart Rewards Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Walmart Rewards Card

Regular Purchase APR
26.99% variable
Annual fee
$0
Rewards Rate
5% back on purchases made at Walmart.com and on the Walmart app, 2% back on Walmart purchases in stores outside of the introductory offer, and 2% back at Walmart Fuel Stations.

The Walmart Rewards Card offers a great rewards rate. Earn 5% back on purchases made at Walmart.com and on the Walmart app, 2% back on Walmart purchases in stores outside of the introductory offer, and 2% back at Walmart Fuel Stations. The sign-up bonus has the potential to be an excellent value, too. Get 5% back for the first 12 months when you use your card with Walmart Pay for in-store purchases, upon approval. Just remember that your cashback rate on purchases in Walmart stores will go down after the intro offer ends, so after your first year with the card, make sure to do most of your shopping on Walmart.com or in the Walmart app to take advantage of the higher rate you get for shopping that way. Note that this is a store card, so you can’t use it outside the Walmart ecosystem.

The Target REDcard™ Credit Card

Target REDcard™ Credit Card

The information related to Target REDcard™ Credit Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Target REDcard™ Credit Card

Regular Purchase APR
25.15% Variable
Annual fee
$0
Rewards Rate
5% at Target & Target.com

The Target REDcard™ Credit Card offers great perks that are sure to please frequent Target shoppers. You receive a discount of 5% at Target & Target.com off every eligible transaction. The discount automatically comes off your purchase — no redemption needed. Other benefits include free shipping on most items, early access to sales and exclusive extras like special items, offers, and 10% off coupon as a gift on your REDcard anniversary each year.* Recently, cardholders received early access to Black Friday deals. Reminder: This card can only be used at Target and on Target.com.

Check If You Pre-Qualify

If you’re on the higher end of the spectrum, you may want to consider checking to see if you’re pre-qualified for any cards. This may help minimize your chance of rejection upon applying because pre-qualification performs a soft pull on your credit. This doesn’t harm your credit score.

Your goal in this credit range should be to use no more than 20% of your total available credit. Pay your bills on time and in full. And keep pumping that positive information onto your credit report until you reach the 700+ category. 

Who You Need to Avoid

Access to credit and loans may come easier than you expect, but that should also be a danger sign. There are several lenders who are willing to provide lines of credits or loans to people with poor credit. These options are often very predatory. If you’re simply trying to rebuild your credit history and improve your credit score, then there is no need to take these offers.

Here are the options you need to avoid when trying to rebuild credit:

1. Payday and Title Loan Lenders – There is never a need to take out a payday or title loan if you’re trying to merely rebuild or establish credit history. Most of these lenders don’t report to the bureaus and you’ll likely end up in a painful vicious cycle of borrowing and being unable to pay it down.

[How to get out of the payday loan trap.]

2. First Premier – The bank claims to want to offer people a second chance when it comes to their finances, but its fee structure and fine print prove the exact opposite. First Premier charges you a processing fee of up to $95 just to apply for a credit card. Then it levies a $75 annual fee on the credit cards and most cards only come with a $300 limit. You’re paying $170 for a $300 credit line! The APR is a painful 36%. In year two the annual fee reduces to $45, but then you’re charged a monthly servicing fee of $6.25. And to top it all off, you’ll be charged a 25% fee if your credit limit is increased. Stay away from this card! Use the $170 it would take to open the card and get a secured card instead.

3. Credit One – Credit One does an excellent job of confusing consumers into thinking they’re applying for a Capital One card. The logos are eerily similar and easily confused.

Creditone

Capital one

While Credit One is not as predatory as First Premier or payday loans, there is really no need to be using one of its cards to rebuild your credit score. Credit One cards can have annual fees that range from $0 to $95 for the first year, then $0 to $99 in subsequent years. If you’re approved for a card with an annual fee, it will be deducted from your initial credit limit. For example, receiving a $300 credit limit and $75 annual fee means you’ll only have access to an initial $225 credit limit. Rather than take the chance of being charged a high annual fee, we recommend saving your money and using a secured card with no annual fee to begin rebuilding your credit score.