Personal finance | October 19, 2022 | Paul Chun
Your credit rating is important: it can impact what you get—and the interest rate you’ll receive—for any kind of loan (car, student loan, mortgage). Even potential employers may review your credit rating. To make sure your rating is up-to-date and accurate, you need to periodically look at your credit report to review whether there are any errors in your personal information or payment history.
Start by reviewing a copy of your credit report from the three largest consumer reporting agencies—Equifax, Experian, and TransUnion. You’re allowed by law to get a free copy of your credit report from each of the reporting agencies each year. Request yours at AnnualCreditReport.com.
If you do notice any errors, the correction process can be simple and take as little as 30 days. Here are some steps to help you fix any mistakes on your report:
The first step in fixing an error on your credit report is to prove that the information is wrong. According to the Consumer Financial Protection Bureau1, the most common mistakes include:
- Errors in personal information
- Incorrect account status (closed accounts listed as open, mistakes in payment dates)
- Balance errors
- Data errors (accounts that show up several times with different creditors listed)
- Incorrect spending limits on your credit cards or an on-time monthly payment that’s reported as late.
The fastest way to dispute your case is to submit it via the credit reporting agency's website. You will need copies of any documents that are related to your dispute case—these can include bank statements, credit card statements, or receipts of loan payments. If you're filing your dispute by mail, try to make your case as easy to read as possible. Be sure to send duplicates of your documents, not original copies.
Once you file a dispute, you’ll most likely receive a response within 30 days. There is no cost or limit to how many disputes you can file. If you don’t receive a response on your credit report in 60 days, contact the credit reporting agency. If the agency agrees there's an error, they have to notify the other major consumer reporting agencies to get it corrected.
If you suspect identity theft, be sure to place a “fraud alert” on your credit with all three consumer reporting agencies. You should also get in touch with any company that’s issued credit and close it ASAP. You can go to identitytheft.gov to report it and use their resources to resolve the issue. Finally, you should file a fraud report with the police.