Most people don’t bother to look at their credit report unless they are applying for a car loan or a mortgage. Sure, there are services you can pay for that will alert you when there is suspicious activity on your credit report. There are even legitimately free sites that will monitor this for you. However, what do you do when you see something on your credit report that doesn’t belong there? There are a few important things you need to do to protect your credit and prevent your score from deteriorating at a rapid pace.
If you see something on your credit that either isn’t yours, or perhaps something you paid off and it is still showing as a chargeoff, you need to take action. The first thing you need to do is write a letter to all three credit reporting agencies: transunion, equifax and, experian. This letter must include the following information and should be typed: your name, address, social security number, item you are disputing, and if possible, a copy of the actual listing on your credit report (you can usually cut and paste this information.)
State in your letter that the account is not yours, was paid off, etc – whatever the actual dispute is. You must also state that if the item is not corrected within thirty (30) days, you demand that the item be removed entirely from your credit report. After the thirty days has passed, if you do not get a response from the agencies, or you do not see the item corrected on an updated report, you need to follow your first letter up with a second. This second letter must state that the thirty (30) days have expired and that you are requesting that the item(s) be removed from your credit. Typically, these items will be removed. (Keep in mind, that if you dispute an item that is in fact legitimately on your credit, it will automatically reappear shortly after it is deleted.
A word to the wise: do not dispute items that are valid debts. This is a trick I constantly hear people tout as a way to immediately clear up your credit without having to pay back your debts. This is a myth – once the creditors see that the item is disputed, if it is a valid debt, it will go right back on your credit. In fact, if you get a mortgage or auto loan based on fraudulent disputes, the bank reserves the right to adjust the initial interest rate offered.
I hope this helps – unless you work in the collections or banking industry, credit can be a very confusing and scary topic. I can say from experience that people always think they are “smarter” than the credit reporting agencies or, dare I say, the banks and try to find a quick fix. My advice is to do things the right way – if you owe the money, make arrangements to pay it back. If you truly believe your credit report is wrong, take the necessary steps to get it fixed. It is definitely worth it in the long run!