How to Dispute Problems on Your Credit Report

Earlier this week, I got a comment asking:

I’ve been married for 7 months now and I was wondering my husband had electric through progress energy and I didn’t even know him then. Well for the past 7 months they have called me every single day wanting me to pay the bill. Now it is on my credit as well on my husbands how do I go about getting that off my credit?

My initial suggestion, of course, was to pay off the debt (and try to work out a payment plan with the creditors, if they’re not able to do it all at once) and look into laws about how collections agencies can treat you. However, the mark may still show up on her credit report. Because she didn’t incur the debt, it’s appropriate that she do her best to get it off her credit.

In order to do this, she’ll have to formally dispute the item on her credit report. Here’s how to find out what’s on your credit report and dispute incorrect items. It can happen to anyone—and it’s estimated that about 25% of credit reports contain serious errors.

1. How to Get Your Free Credit Report

The three major credit bureaus—Experian, Transunion, and Equifax—are required to give you one free copy of your credit report every year. This was set up so that consumers could keep an eye on their credit reports.

You can access your credit report for free by going to annualcreditreport.com (not freecreditreport.com) and filling out your information. You’ll then have the choice of picking any of the three bureaus. Many people spread this out and check one report from a different bureau three times a year, but you can also check all three at once.

When select the bureau, you’ll be directed to their secure website. At this point, they may attempt to sign you up for credit monitoring services. You do not have to sign up with these services in order to receive your free credit report, each has an option to bypass.

2. How to Read Your Credit Report

Your credit report should show every loan or credit card (revolving loan) you currently have open. It will include any flags from the last 7 years—including bankruptcies, certain late payments (late payments of less than 30 or 60 days may not be reported), defaults on loans, and non-payment for certain other things, like the commenter’s husband’s electric bill and my friend Brian’s library fines. After 7 years, these should not show up on your report any longer.

What you’re looking for are reporting errors. Does it report that you owe on a debt incurred by your significant other before you were married or living together? Does it report a debt you paid off, or the same debt twice? Is your name misspelled or your address outdated? These are all things to get corrected.

3. How to Dispute Errors on Your Credit Report

The FTC has put together a great resource on disputing errors on your credit report. Some of their tips:

1) Gather as much substantiating material as you can. If you’re trying to prove the spelling if your name or your new address, make a copy of your driver’s license. Print out a bank statement with the canceled check showing that your payment was cashed or print a screenshot of your bank account and highlight the payment.

2) Circle or otherwise note the errors on your credit report.

3) Include a letter with the specifics of the error on the report, the reasons why it’s an error, and the proof you’re sending. Be as precise and brief as possible. If you ramble, it may become unclear exactly what you want them to do.

In the commenter’s case, I also suggested that she include information about and proof of her living arrangements at the time the debt was incurred. Otherwise, the reporting agency may assume that she and her husband were living together with only his name on the lease and electric bill. That may have been the assumption which led the electric company to report it as a non-payment on her account in the first place.

Mail a copy of the letter along with copies (not originals) of your supporting documents to the credit bureau(s) you received the report(s) from. Send the letter as certified mail with “return receipt requested.” Save the return receipt when it comes back, as proof that you made this dispute.

Mail another copy to the company whose item you’re disputing. Include another copy of your credit report and copies of your supporting evidence. Request return receipt. If you can, find the specific address the company uses to handle disputes.

Disputing an item does not guarantee that it will be removed from your credit report. If the credit bureau thinks your claim is frivolous, they won’t investigate. Even if they investigate, the charge may disappear from your account for a short-time, but it will come back on if they decide not to accept your claim.

I add this because some “credit repair” groups use the strategy of disputing everything bad on your credit report, including legitimate complaints from your creditors, which may have the effect of removing them temporarily. But it doesn’t work in the long run, because the charges are legitimate. Then the only person better off is the repair group, who’s got your money.

4. Once Your Credit Report is Fixed

If you successfully dispute items on your credit report, you can have a corrected sent to people to whom the change would be relevant—employers (or potential employers), or others. According to the FTC document:

If you ask, the consumer reporting company must send notices of any corrections to anyone who received your report in the past six months.

You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If your problem isn’t human error, but identity theft, this this FTC resource can help you with long-term strategies. Disputing fraudulent charges is a step, but there’s a lot more that has to be done. This has information on freezes, on submitting reports of the fraud to various groups, and steps to recover your identity.

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