Credit Reports - Inaccuracies Can Be Expensive

When it comes to your credit report, any inaccuracies about your account information, payment history, or balances owed can decrease your credit score and wind up costing you thousands of dollars in higher interest rates and monthly payments on new credit accounts. Why? Because Equifax, TransUnion, and Experian, the three credit bureaus in the U.S., calculate your credit score based on the information in your credit report. And lenders use credit scores to determine how creditworthy you are and what types of loans and interest rates you quality for.

How credit report mistakes happen

Sometimes the information in your credit report is simply incomplete and cannot factor into your overall credit score. Other times you may have applied for credit using your formal name in one case and a nickname in another, resulting in one of the accounts not appearing on your report. Occasionally, a mistake is caused by human error when someone misreads or incorrectly enters data.

How to correct credit report data

Whatever the cause of the error, the good news is that it's a relatively simple process to correct it on your credit report. Just go to the website of the credit bureau which is showing the mistake and complete an online dispute form. The bureau will investigate the disputed information and remove it if they determine it is incorrect. Once the information has been corrected, it will take two or three months for the revised information to reflect in your credit score.

Filing a statement of dispute

There may be some cases, however, when the credit bureau's investigation does not result in correcting information in your report. If this occurs, you can request that the credit bureau place a statement about the dispute in your credit report and send a copy of the revised document to any lender which previously requested your report. Although there's usually a fee for this service, the fact that you believe the information is incorrect will be available to lenders.

To check if your credit report contains any errors, you can order a free credit report from each credit bureau once each year at www.annualcreditreport.com. If you'd like to check your reports more frequently, go to the credit bureau websites: