How to Dispute Credit Report Errors

How to Dispute Credit Report Errors

1. Wait It Out

Obviously, this is not the most ideal way to deal with your poor credit. But it is a legitimate method of removing negative items from your credit report – each item that is on your report will expire after a set time.

  • Collections accounts may be reported on your credit score for up to 7 years, plus 180 days from the date when you first fell behind on your bills with a creditor such as a credit card company.

  • Bankruptcies are treated differently, depending on which credit bureau is reporting your score. Equifax maintains bankruptcies for up to 6 years on your credit report – and if you go bankrupt again, the second bankruptcy will stay on your report for 14 years. TransUnion will keep your bankruptcy on file for up to 6-7 years from the date of discharge, or 14 years from the date of initial filing, depending on provincial law.

  • Late payments will remain for 7 years beyond the initial delinquency date.

  • Auto repossessions will remain on your credit report for 7 years beyond the date of repossession.

If you have had a lot of credit trouble in the past, but you have repaired your credit, it’s worth looking at your credit report to see if you have any items that should be discharged soon – this can be very helpful when repairing your credit.

Dispute With the Business That Reported to the Credit Bureau

Now, you can completely bypass the credit bureau and dispute directly with the business that reported the error to the credit bureau, e.g., the credit card issuer, bank, or debt collector. You can make the dispute in writing, and the business is required to do an investigation just like the credit bureau.

When the business determines that there’s indeed an error on your credit report, they must notify all the credit bureaus of that error so your credit reports can be corrected.

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How Long Do Collection Accounts Stay On Your Report?

Paid or unpaid collection accounts can legally stay on your credit reports for up to seven years after the original account first became delinquent. Once the collection account reaches the seven-year mark, the credit reporting companies should automatically delete it from your credit reports.

If your collection account doesn’t fall off of your credit report after seven years, you can file a dispute with each credit bureau that lists it on your report.

Negative Impacts on Your Credit Score

Here is a list of factors that can impact your credit score in a negative way and stay on your credit report for up to seven years in most cases.

  • Late Payments or Non-Payment: One of the most important factors of your credit score. Paying your debts late on a consistent basis can signal lenders that you cannot afford, or are unwilling, to pay your debts. If you are overdue on a payment by 30 days, according to Equifax, your score can drop 100 points.
  • Having a charge-off: When a creditor gives up on you paying your debt, they “charge off” your account which can cause your credit score to drop by 100 points or more.
  • Bankruptcy: This should be considered as your last resource. Declaring bankruptcy can negatively affect your score by up to 200 points or more.
  • Foreclosure: Depending on what your starting score is, a foreclosure can cause up to a 100 point drop.
  • Repossessions: A car repo may cause your score to drop over 100 points. Additionally, a note about the repossession will stay in your report for up to seven years.
  • Judgments: This is when a court is involved to ensure debt repayment. The impact can vary but scores can drop over 100 points. This, along with tax liens, stay on your credit for 10 years and it is renewable for another 10 years if the plaintiff decides to go back to court.
  • Collections: When a credit hires and outside firm to collect payment due on a debt. Categorized as payment history, scores can drop over 100 points too.

Wait Out the Credit Reporting Time Limit

If all else fails, your only choice is to wait for those negative items to fall off your credit report. Fortunately, the law only allows most negative information to be reported for seven years. The exception is bankruptcy, which can be reported for up to 10 years. The other good news is that negative information affects your credit score less as it gets older and as you replace it with positive information. The wait may not be as difficult as you’d think. Consumers can request their own credit report for free every 12 months from the three major reporting agencies. So, to be sure, you should request a report after the aging period to confirm.

It is important to note, however, that while the credit reporting agency will generally delete the negative information from the report after the seven-year aging period, information may still be kept on file and can be released under certain circumstances. Those circumstances include when applying for a job that pays over a certain amount, or applying for a credit line or a life insurance policy worth over a certain amount. Depending on where you live there may be more favorable regulations under state law, such as a shorter statute-of-limitations. You should contact your state's Attorney General's office for more information.

In the meantime, you can improve your credit by making timely payments on accounts you still have open and active.

Can a collection agency report an old debt as new?

Collection agencies cannot report old debt as new. If a debt is sold or put into collections, that is legally considered a continuation of the original date. It may show up multiple times on your credit report with different open dates, but they must all retain the same delinquency date. They should also all be discharged on the same date — seven years after the original open date.

Repairing Bad Credit Yourself

If you would rather not pay for delete or pay a credit repair firm, there are a few steps you can take to begin getting your credit back on track:

  • Review your credit reports for negative information that’s inaccurate. Initiate a dispute of inaccuracies or errors online with the credit bureau that’s reporting the information.
  • Consider having someone you know with a strong credit history add you to one of their credit cards as an authorized user. This can transplant that person’s positive account history to your credit report.
  • Research credit builder loans and secured credit cards as additional credit-building options.
  • Get in the habit of paying your bills on time monthly. Payment history has the most significant impact on credit scores.
  • Weigh the pros and cons of debt settlement to resolve collection accounts or charge-offs. Debt settlement allows you to pay off debts for less than what’s owed.
  • Focus on paying down balances on any credit card or loan accounts that you have open to improve your credit utilization ratio.

Tip You can get one free copy of your credit report from each of the three major credit bureaus annually through AnnualCreditReport.com.

1. Do Your Research & Check All Credit Reports

To get details on your collection account, review all of your credit reports. You can do this by visiting AnnualCreditReport.com. Normally, you can only get one free copy of each report annually. However, due to the Covid-19 pandemic, you can check your reports from all three credit bureaus for free weekly until April 20, 2022.

Your credit report should list whether the collection is paid or unpaid, the balance you owe (if any) and the date of the account’s delinquency. If you don’t know who the original creditor is and it’s not listed on your report, ask the collection agency to give you that information.

Afterward, compare the collection details listed on the credit report against your own records for the reported account. If you haven’t kept any records, log into the account listed to view your payment history with the original creditor.

A Credit Report is Complex Yet Simple

Your credit report changes every month. All your lenders add and subtract information. Your report from each credit bureau is different from the other two bureau’s files on you.

Then, all this data gets distilled into a three-digit number that most lenders equate with your identity. It’s easy to see why credit is so confusing and frustrating.

But here’s a simpler way to look at it: To get rid of your bad credit, you can:

  • Remove Negative Information
  • Add Positive Information
  • Be Patient

Ultimately, that’s how you play this game. This post has been about removing negative information because doing this can increase your score quickly.

But adding positive information is just as important. You can add positive data by making on-time payments, keeping your credit card balances paid down, and applying for new credit only when you feel certain you’ll get approved.

Over time you’ll start seeing your credit score climb.

Removing Collection Accounts from a Credit Report

Whether your attempts to pay for delete are successful can depend on whether you’re dealing with the original creditor or a debt collection agency. “As to the debt collector, you can ask them to pay for delete,” says McClelland. “This is completely legal under the FCRA. If going this route, you will need to get that in writing, so you can enforce it after the fact.”

What to keep in mind, however, is that pay for delete with a debt collector may not remove negative information on your credit history that was reported by the original creditor. The creditor may claim that its contract with the debt collection agency prevents it from changing any information that it reported to the credit bureaus for the account. That said, some debt collection agencies take the initiative and request that negative account information be deleted for customers who have successfully paid their collection accounts in full.

Before taking this step, consider how collection accounts may be impacting your credit score. The FICO 9 credit scoring model, for instance, doesn’t factor paid collection accounts into credit score calculations. So if you’ve paid off or plan to pay off a collection account, then you may not need to pursue pay for delete if your only goal is improving your credit score.

Important If you’re waiting for a debt to become time-barred. i.e. past the statute of limitations in which collection actions can be enforced, it’s important to avoid restarting the clock—which can occur if you make any promise to pay.

Impact of identity theft on your credit report

Identity theft — when someone steals your personal information and uses it to open new financial accounts — can wreak havoc on your credit. These new accounts show up on your credit record and hurt your score, especially if they’re delinquent or if the identity thief applied for several in a short amount of time.

Cleaning up your credit after identity theft can take anywhere from several months to years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. This is why keeping a close eye on your report and learning how to protect yourself from identity theft will help you to keep your information safe.

How to remove negative items related to identity theft

If you believe you’ve been a victim of identity fraud, file a dispute with the Federal Trade Commission (FTC) online at IdentityTheft.gov or by phone at 1-877-438-4338. You should also file a police report.

To prevent further damage to your credit history, these are the steps you should take:

  • Notify the incident to Transunion, Experian and Equifax through phone or mail
  • Place a security freeze and fraud alert on your credit report
  • Request a copy of your credit report through AnnualCreditReport.com
  • Look out for unauthorized transactions or new accounts that don’t belong to you
  • Contact creditors to close compromised accounts
  • Consider subscribing to an identity theft protection or credit monitoring service

Identity Theft

When someone steals and uses your personal information, your credit is at a great risk. If your information is used to apply for new lines of credit and these accounts go into default, you are still responsible for them.

Thanks to the internet, finding people’s personal information doesn’t take that much effort. Here is a list of different ways your identity can be stolen.

  • Credit card theft
  • Credit card skimming
  • Browsing an unsecured website
  • Malicious software
  • Mail Theft
  • Phishing scams

If you suspect any information on your credit report looks suspicious, contact your lender immediately to file a report. Having your identity stolen can result in financial loss, credit damage, and loss of peace of mind. Depending on the severity of your stolen personal information, it can take years to resolve.

This is why it is utterly important to report anything that looks suspicious when looking over your report. 

Although the risk of identity theft cannot be entirely eliminated, there are some measures you can take.

  • Monitor your credit report on a regular basis
  • Report suspicious information
  • Freezing or locking your account temporarily
  • Contact law enforcement and file an identity theft report
  • Set up a fraud alert

5. Consult With A Professional

There are many independent “credit repair” agencies in Canada. These agencies use the aforementioned techniques – along with a deep knowledge of the Canadian credit system – to help you remove negative items from your credit score.

However, the buyer should beware – there is no guarantee that your credit repair agency will succeed in removing negative items.

If you don’t know where to start when rebuilding your credit, it can be a good idea to partner with a credit agency, but make sure you do your research, and pick a Canadian credit repair agency with a history of good outcomes and great customer feedback.

Follow These Tips To Repair Your Credit, And Remove Negative Credit Items!

While bad credit can be very difficult to deal with, it’s not the end of the world. With this handy guide, you’ll have all the knowledge you need to deal with negative credit items, and improve your credit score!

Got bad credit? Need transportation in Winnipeg – or anywhere else in Canada? Come to Ride Time now! If you can give us proof of employment for 3 months, show us a pay stub proving an income of $1,500/month before deductions, and have a valid Canadian licence, we can help you find a fantastic used car for a reasonable rate!

Our network of 15+ lenders specializes in lending to Canadians with sub-par credit. So don’t trust anyone else – come to Ride Time today, and browse our selection of reasonably-priced, reliable used vehicles now!

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