Credit Repair
What’s Worth Disputing on Your Credit Report and Why?
Part of the series: The Credit Repair Process
Apr 7, 2021 10 min read
SUMMARY
- You should dispute any error on your credit report, no matter how small.
- Some errors could cause minor inconvenience while others could harm your ability to have access to credit.
- Be sure to read your credit report carefully to find any possible errors.
- Checking for errors also helps you to monitor for fraud.
IN THIS ARTICLE
- Should You Dispute Everything That's Inaccurate?
- What Should You Dispute (and Why)?
- Incorrect Name and/or Social Security Number
- Incorrect Employer or Home Address
- Accounts that Don’t Belong to You
- Incorrect Payment Status on Accounts
- Incorrect Status on Closed Accounts
- Incorrect Balances, Credit Limits, and Loan Amounts
- False Credit Inquiries
- Ways to Protect Your Credit
Reviewing your credit report to ensure only accurate information is included is an important step toward rebuilding your credit. While most credit reports are error free, it’s good to know for certain that yours is as well. Knowing what types of information that can be challenged will help you review your report more efficiently, just in case you need to file a dispute with one or more of three credit bureaus (TransUnion®, Equifax®, and Experian™).
Should You Dispute Everything That's Inaccurate?
Yes. The rule of thumb is to dispute any information that is inaccurate or outdated. You can also request that the credit bureaus remove information about defaults, bankruptcies, late payments, or court judgments that are seven years old or older.
Keep in mind, the credit bureaus may request backup information when you file a dispute — so have your documentation ready. If you dispute items with the bureau that are actually accurate, your dispute may be labeled as “frivolous.” This is why documentation is key.
What Should You Dispute (and Why)?
No item on your credit report is too small to dispute if it’s inaccurate. As you’ll learn below, even things that seem like non-issues — such as an error in your list of past addresses — are worth disputing. Your goal is to ensure that your credit history provides creditors a fully accurate representation of you and your credit history.
1. Incorrect name and/or Social Security Number
Why correct them: Your name and Social Security number link your credit and loan accounts to your credit report. If the wrong name or Social Security number appears on your report, someone else’s accounts may be associated with you. A discrepancy can also cause automated underwriting programs to reject your application, or you might be asked to provide extra information to verify your identity.
Score impact: No direct impact, but it can influence the verification process and create hurdles to obtaining credit and loans.
2. Incorrect employer or home address
Why correct it: Creditors use employer and address information to verify your identity. If you see this information associated with you incorrectly, it’s important to have it removed.
Score impact: No direct impact, but it can influence the verification process and create hurdles to obtaining credit and loans.
3. Accounts, third party-collections, or public records that do not belong to you
Why correct them: Because you shouldn’t be held responsible for someone else’s mistakes — even it’s just a simple mix up. If someone else’s delinquent accounts or court records are linked to you, then your credit opportunities could be hurt by their activities.
Score impact: Correcting these mistakes can have a big impact on your credit score.
4. Accounts, third party-collections, or public records that are more than seven years old
Why correct them: Most items, including delinquent accounts, accounts in collections or records of public judgments such as foreclosures or repossessions, must be removed from your report after seven years. Although these accounts may have been settled years ago, they can still affect credit decisions today.
Score impact: Correcting these mistakes can have a moderate impact on your credit score.
5. Incorrect payment status on accounts
Why correct it: Payments play a big role in your credit and credit score. Late payments can have a significant impact, depending how often they occur, how far past the due date a payment was made, and how long ago the late payment was. By correcting any incorrect late payments, you improve your on-time payment history.
Score impact: Low to high. Late payments more than two years old have a smaller impact. But recent late payments can have a very large impact. If the account was 90 days or more past due, the effect will be compounded.
6. Incorrect status on closed accounts
Why correct it: How an account was closed makes a difference in your score. If the account was paid in full, it’s unlikely to negatively influence your score. But if the account shows up as being settled — meaning you negotiated a payoff amount that was less than what was owed — or closed by the lender, your credit score may be affected.
Score impact: Low to medium, depending on the reason for the closure. Recent closures have more impact, but the reason for the closure and time since closing play a factor as well.
7. Incorrect balances, credit limits, and loan amounts
Why correct them: When lenders are considering you for a loan or credit product, they look at your credit utilization ratio, the amount you owe vs. your available credit. So, if you recently received a credit line increase and it’s not showing up on your report, you’ll want to correct that to show that you have a favorable utilization ratio.
Score impact: Low to moderate. Most of the time a single balance will not have a huge impact on your score but, if you have multiple accounts reported incorrectly or very few accounts on your credit report, this impact may make a meaningful difference in your score.
8. False credit inquiries
Why correct them: Inquiries typically have a smaller effect on your score than do other factors. But inquiries that are not yours are a sign of identity theft or a case of mistaken identity. If there is a credit inquiry on your report that’s not associated with a loan or credit card you applied for, consider placing a freeze or a lock on your report until you can file a dispute. You can do this by contacting the credit bureau directly; a freeze will prevent anyone else from applying for credit in your name. It’s also a good idea to change your PINs and account passwords to reduce the risk of someone using your information again.
While you can dispute inquiries with all three credit bureaus, only Equifax® allows you to dispute inquiries online. Removing inquiries won’t necessarily affect your score, but it will help you prevent negative effects to your credit that are caused by identity theft.
Score impact: This may only have a low impact on your credit score but preventing identity theft can save you a big headache in the future.
Ways to Protect Your Credit
If you see accounts you don’t recognize or inquiries for loans and credit cards you didn’t apply for on your credit report, those may be signs of fraud and identity theft. To prevent bad actors from abusing your credit, contact your bank or card issuer and request that it cancel your current cards and send you new ones.
Then you can place a credit freeze or credit lock on your credit reports. A credit freeze prevents lenders from accessing your report, so if someone stole your personal information and is applying for accounts in your name, the freeze will prevent the application from being processed. A credit lock is similar to a credit freeze, though you can lift the lock temporarily if you want to apply for a loan or credit card, but you still want your account to be locked down.
Placing a freeze or lock on your account is free through the credit bureaus’ websites.
Remember, if it is inaccurate, it doesn’t belong on your credit report, no matter how small the issue. By disputing online, you can easily tackle your credit reports and move on with your life.
The content provided on Elevate.com is for educational and informational purposes only and does not constitute financial or legal advice. It is not intended as a substitute for professional advice. Elevate is not acting as a credit counseling or repair service, debt consolidation service, or credit services organization in providing this content. Elevate makes no representations about the reliability or suitability of the information provided – any action you take based on this content is at your own risk.
About the author
Nathan Foley questions everything — and thinks you should too. As Elevate’s resident mathematician, he pores over datasets to find the truth amid the fluff and translates insights into ideas for improving personal financial resilience.
SERIES
The Credit Repair Process