Helpful Articles
The Correct Way to Dispute Inaccurate Credit - 4 Easy Steps
There
are many strategies when it comes to disputing derogatory information on your
credit report(s). You can find dozens of different ideas and samples on line,
or you can hire a credit repair professional or a lawyer. The Big 3 credit bureaus, (Equifax, Experian
and TransUnion), allow you to file your disputes on their respective web sites
if you wish. I’ve seen disputes of all
kinds: disputes that quote the law, disputes that are threatening, disputes
written in crayon, disputes that are long and short, and disputes that I don’t
even understand. The fact is, any of these may achieve the goal of correcting
or deleting a derogatory trade line. But
your odds are much better if you use this four-step process.
1.
BE CLEAR ABOUT EXACTLY WHAT IS INACCURATE
It is important to explain in
summary fashion precisely what is wrong with the reporting that you
challenge. If you were never 30 days
late on a payment, you should say: “you are reporting me 30 days late on XYZ
account, and that is not accurate”.
If the inaccuracy involves a more complex issue like an incorrect
charge-off, bankruptcy, incorrect balance, etc., you may have to use a few
sentences to explain what is inaccurate about the reporting. The way to drive this point home is to
enclose the one page of your credit report that contains the problem, and
actually circle or highlight the “30 days late”. Then be sure to reference the one page, by
saying: “I have enclosed a copy of my credit report with the XYZ account, and I
circled the inaccurate reporting for your easy reference”.
2.
EXPLAIN WHY THE REPORT IS WRONG
This can be very simple or very
detailed depending on the inaccuracy you are disputing. Using the example
above, this is very easy. You can just say: “you are reporting me 30 days late
on XYZ account, and that is not accurate, because I was never 30 days late”. However, if you are disputing something more
technical like date of first delinquency, payment history, etc., your dispute
must demonstrate why these items are wrong.
For instance: “you are reporting XYZ account with a $500 balance. This
is not accurate because this account was transferred to another credit card
account and closed with a zero balance in May of 2014”.
3. SHOW
THEM WHY THE CREDIT REPORT IS WRONG
Enclose evidence to prove you are
right and the reporting is wrong. Using the example above you could say: “you
are reporting me 30 days late on XYZ account, and that is not accurate, because
I was never 30 days late”. I have enclosed my bank statements and
highlighted the payments I made to XYZ for the past three years. As you can see, there are no late payments to
XYZ”. Again, if you have a more
complex dispute, you can and should attach any and all documents that tend to
prove you are correct. This could
include mortgage documents, bankruptcy filings, letters, account statements,
receipts, tax returns, etc. (Always be sure to black out account numbers and
other sensitive information on your attachments).
4. SEND YOUR DISPUTE BY CERTIFIED MAIL
Occasionally, the Big 3 will make a
mistake and never even respond to your dispute. They might argue that they
never received your dispute in the mail.
How can you avoid this problem? Send it certified!, by return receipt
mailing so their receipt of your letter is documented. This will cost you some
money but it’s well worth it. Trust me,
when you receive that stamped green card in the mail confirming the credit
bureaus received your dispute and signed for it, you will feel a sense of
relief. It’s worth every penny. Moreover, you will now have the actual date
they received your dispute. Since they have 30 days to investigate and respond
to you, there will be no doubt as to the deadline.
In
Sum: What, Why, Show, Certify
1.
What is inaccurate?
2.
Why is it inaccurate?
3.
Show the “Why” with proof
4.
Send it certified
WHAT
IS SO SPECIAL ABOUT THIS FOUR-STEP PROCESS?
Following the “What, Why, Show,
Certify” method allows you to organize your dispute letter so that it is very
simple to complete and understand. But far more important is the legal
effect of a dispute utilizing this method. Credit bureaus and creditors
must conduct a “reasonable investigation” when they receive your dispute to
comply with the Fair Credit Reporting Act, (“FCRA”). When you receive the credit bureau response
to your dispute, one of three things generally happen: 1) They correct the inaccuracy; 2) They
delete the account entirely; or 3) They determine that the credit reporting IS
accurate and tell you it will remain the same.
The legal effect of your letter is
powerful if the credit bureau wrongly determines that the reporting is accurate,
when in fact it is not. You have now
clearly explained your position and showed them with documentary evidence. Plus, you sent it by certified mail, so they
cannot deny receiving it. You have now
opened the door for liability and damages under the FCRA. How could they have conducted a “reasonable
investigation” if you provided all the proof and evidence of the inaccurate
credit reporting? You now may be entitled
to damages for their violation of the law, including money damages, correction
of the derogatory trade line, along with attorney fees and court costs.
In sum, you should strive to organize
your dispute. As a lawyer, I can best
represent you in a FCRA lawsuit if your letter follows the “What, Why, Show,
Certify” method. If you are interested
in correcting your credit, and at the same successfully protecting your legal
rights in the event the Big 3 do not comply with the law, I highly recommend
that you dispute the correct way.
