If you find a mistake on your credit report, a letter disputing the error should be your first course of action. Your credit report affects most areas of your life.It’s reviewed by lenders, landlords, utility and insurance companies, and sometimes even evaluated by employers considering you for a job. Roughly 80% of reports contain errors–and 25% are serious enough to cause a denial of credit, according to a survey of 197 credit reports by the U.S. Public Interest Research Group. It’s important for your dispute letter to contain the right information so your complaint can be addressed properly. Here are five keys to an effective credit report dispute letter:
1. Know what you can dispute.
You have the right to dispute anything in the trade section, such as information regarding credit cards, student loans, auto and personal loans, and items in the sections for collections and public records. You may also challenge fraudulent credit inquiries and “anything that’s not correct or that’s outdated and only allowed to stay on your credit report for a certain period of time, such as bankruptcy,†says John Ulzheimer, president of consumer education at SmartCredit.com, a credit education website.
You can’t, however, dispute negative information if it is indeed correct and if it is still within the statute of limitations for reporting. For example, a Chapter 7 bankruptcy will stay on your report for 10 years; a foreclosure, for seven.
2. Consolidate disputes.
To avoid lengthening the response time, consolidate all disputes in one letter; don’t send a letter for each issue. Also, send the letter via certified mail, with a return receipt requested.
Know what to include in your letter.
3. Keep it simple and direct.
Keep it simple and direct, advises Gerri Detweiler, director of consumer education for Credit.com. Stick to the basics such as identifying information (name, address, last four digits of your Social Security number, etc.) and “a credit report reference number, which should be included in the copy of the credit report you received from the credit reporting agency.â€
Ulzheimer also recommends that you “clearly identify the item you disagree with, why you disagree, and what you would like to have happen.†And, he adds, send supporting documentation as needed.
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