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Monitoring your free credit reports each year gives you a chance to catch mistakes that could harm your credit rating or even indicate identity theft. Finding an error, however, is just the first step to protecting your credit. If you notice inaccurate information on your credit report, you should follow these three steps to fix the situation.
Sending a dispute letter to the credit bureau that reports inaccurate information is the first step to removing errors from your credit report. Your letter should clearly explain why you dispute the inaccurate item. You should also include copies of documents that support your point. Documents may include bank statements, credit card statements and receipts. Make sure you only send copies. Do not send the original documents.
Once you’ve written your letter and gathered your evidence, make copies for yourself. Then, you can send the letter by certified mail to the credit bureau. Choose to get a return receipt from the post office so you will know when the credit bureau receives your dispute.
Upon receipt, the credit bureau should begin investigating your claim. Investigations typically take about 30 days. If the investigation ends in your favor, the bureau must report the finding to the other credit bureaus.
While you wait for the credit bureau to conduct its investigation, you should send a copy of your dispute letter and supporting evidence to the person or company who reported the inaccurate information.
If the information provider disagrees with your dispute, then it must contact the credit bureaus to let them know that a dispute has been started.
If the provider agrees with your dispute, then it must contact the credit bureaus to remove the mistake and update your report with accurate information.
Unfortunately, credit bureaus and information providers don’t always disagree with disputes. When this happens, you should ask the bureaus to add a copy of the dispute to your file. You can also ask them to provide your statement of the dispute to anyone who requests your credit report. Companies frequently charge a fee for sending dispute statements, but the specific amount varies by credit bureau and how many statements get sent.
Remember that the three major credit bureaus often have different information on their reports. Because of that, you should request free reports from Equifax, Experian and TransUnion every year. Otherwise, you could miss mistakes that will damage your financial reputation.
Carefully monitoring your credit report will save you money in the long run by keeping your credit score accurate.