Credit bureaus in the country collect individual data and prepare a credit report. They also calculate the credit score using their proprietary algorithm. However, there could be errors in your credit report that can hamper your chances of getting a loan approval.
If you identify an error on your credit report, you should start by disputing that information with the credit reporting company (Experian, Equifax, and/or Transunion). You should explain in writing what you think is wrong, why, and include copies of documents that support your dispute.
What happens after you dispute information on your Credit Report?
If you suspect that the error on your report is a result of identity theft, visit IdentityTheft.gov , the federal government’s one-stop resource to help you report and recover from identity theft.
Credit reporting companies must investigate your dispute, forward all documents to the furnisher, and report the results back to you unless they determine your claim is frivolous. If the consumer reporting company or furnisher determines that your dispute is frivolous, it can choose not to investigate the dispute so long as it sends you a notice within five days saying that it has made such a determination.
If the furnisher corrects your information after your dispute, it must notify all of the credit reporting companies it sent the inaccurate information to, so they can update their reports with the correct information.
If the furnisher determines that the information is accurate and does not update or remove the information, you can request the credit reporting company to include a statement explaining the dispute in your credit file. This statement will be included in future reports and provided to whoever requests your credit report.
5 Most Common Credit Report Errors
1. Personal Information Errors
There are times when credit bureaus confuse one consumer with someone else or when credit reports list incorrect addresses. These incidents are primarily caused by identity or personal information errors. Here are some of the most common identity errors that you should look out for:
- Incorrect name
- Misspelling of your name
- Incorrect middle initial
- Incorrect contact information (e.g., phone number and address)
Your basic personal facts should always be updated whenever you move to another house, change your name, or use a new phone number. If you recently filed a divorce and have joint accounts with your former spouse, remove your name from these accounts to avoid suffering from incurring debts in the future.
2. Account Errors
- Open accounts reported as closed or vice versa
- You are reported as the owner of the account when you are just an authorized user
- Accounts that are reported as delinquent or late in spite of timely payments
- Incorrect date of date opened, date of last payment, or date of first delinquency
3. Account Reporting Errors
Errors may happen in the actual status of your accounts, too. Among all these inaccuracies, missed and late payment dates are one of the most alarming. If taken for granted, you may end up defaulting on your payments. Even worse, these errors can cut back your credit rating significantly.
Below are the most common errors that could happen in your account:
- An opened account is reported closed, or vice versa
- Timely account payments are reported late or delinquent
- Incorrect dates of late payments
- Incorrect dates on opening or closing an account
- Incorrect balance
- Incorrect credit limit
- A consumer is listed as a primary account holder rather than an authorized user, or vice versa
- Seven-year-long debts or older.
4. Balance Errors
- Accounts listed with the incorrect current balance
- Accounts listed with an incorrect credit limit
5. Duplication Errors
The same debt listed more than once, possibly under different names or creditors
What to do when you find errors in your Credit Report?
- Notify the credit bureau of the mistake.
- Explain what the mistake is and why it’s an error. Back up your claim with information.
- Also, reach out to your financial institution and request them to provide the correct information to the credit bureau.
- If the errors in your credit report make you believe that you are a victim of identity theft, request your credit bureau to place a fraud alert on your account. This will notify the lenders if anyone tries to misuse the account, making them take additional steps to tighten the security of the account.
- Once you intimate the errors to the credit bureau, your dispute will be investigated, and the necessary changes will be made post-investigation.
How you can dispute errors in your Credit Report?
- Fill the form
You can raise an online dispute with the credit bureau to dispute errors. Visit the dispute resolution section and fill the form to fix the error. It should be noted that you will need to submit the nine-digit number provided on your credit report which contains the disputed details.
- Process
Once you submit your online complaint form, the credit bureau will verify the dispute by approaching the bank. It should be noted that credit bureaus cannot make changes in the credit report on their own.
- Dispute Resolving Period
Generally, it takes around 30 days for your dispute to get resolved. As per laws, banks have to come up with a formal resolution for a dispute within 45 days of the issue being raised. You will be noticed about the result once it is resolved via an email.
Steps for CIBIL Dispute Resolution
Step 1: Go to www.cibil.com, and create an account. If you already have one, simply sign in.
Step 2: Select the ‘Credit Reports’ option and click on ‘Dispute Centre’ before selecting ‘Dispute an Item’.
Step 3: Fill in the online CIBIL dispute form and choose the relevant section.
Step 4: Select the ‘Dispute Type’, enter a value if you are disputing data inaccuracies, and click on ‘Submit’.
Once the CIBIL dispute form is submitted, TransUnion CIBIL will verify the information with the relevant lender, and the status will most likely be updated within a month.