Your credit report is a record of information collected from your creditors, which summarizes your credit history. When you apply for credit, your bank, credit card company or mortgage lender uses your credit report to evaluate the potential risk of lending money to you. In your credit report, the lender will find out what credit card accounts and loans you have, whether they are in good standing, and whether you make payments on them in a timely manner.
If any action has been taken against you because you didn’t pay your bills, or if a company had to charge off a debt that was not repaid by you, that will be on your credit report, too. Delinquent debts, late payments, or bankruptcy filings, also appear on your credit report. Matters of public record, such as a tax lien or foreclosure, may also be reported to the credit bureaus as well.
These types of marks on your credit are called “negative items” and they can stay on your credit report for a matter of years, bringing down your credit score and making it difficult for you to qualify for loans on good terms. If a negative item is inaccurate – for instance, if a bad loan has been mistakenly added to your report when you never took it out — you are allowed to dispute any inaccurate information with the credit bureau and get it removed from your credit report. Under law, both the credit bureau and the information provider are responsible for correcting any inaccurate information, and must investigate any disputes within 30 days and notify you of a resolution.
In order to dispute a wrong negative item in your credit report, it’s advisable to send a letter to the consumer credit bureau (or bureaus, if more than one report is inaccurate) and notify them in writing of the erroneous information. In your letter, you should identify the item or items you dispute, explain your position and request that the information be removed or corrected. It helps to include copies of any documents that support your dispute, such as letters from the creditor confirming that you have paid off the account.
Unfortunately, when negative information on your credit is accurate, the only remedy is patience and the passage of time. Some people may assure you that it is worthwhile to dispute an accurate negative item as well, on the assumption that, while the dispute is going on, the item will be temporarily removed and your score will go up. However, this assumption is false. If you dispute accurate items, you run the risk of your dispute being flagged as “frivolous.” Even in the unlikely event that your credit is “fixed” and the item is dropped, if the negative item is accurate, your creditor can simply report the same item to the credit bureaus again next month– after you’ve already paid the credit report scam company for “repairing” your credit.