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How to Write an Effective Credit Dispute Letter

Writing A Credit Dispute Letter

If you’ve been looking for ways to improve your credit score, then something you may want to try is a credit dispute letter. 

Credit dispute letters are simple enough to create and may help eliminate damaging, inaccurate information that could be standing in the way of your financial future. However, there are some important things you’ll need to know about these letters before you submit one. 

In this post, we’ll talk about how to write a credit dispute letter and what it should contain. We’ll also discuss how they work and what you can realistically expect from the process.

What is a Credit Dispute Letter?

A credit dispute letter is a simple written communication notifying a major credit reporting agency that you believe there is an error on your credit report. An effective letter will clearly indicate which piece of information is incorrect, why you believe it’s false, and a call to action to remove the error from your report.

Why Dispute Items on My Credit Report?

Like it or not, your credit report is a lifelong record that follows you everywhere you go. As the name implies, it contains the details of every credit card or loan that you’ve ever had, with information such as:

  • Your payment history – Did you pay on time? Meet minimum charges? etc.
  • Your credit utilization – How much credit was given? How much did you use? Were you ever denied?
  • How long you’ve had each account – Do you open and close cards regularly?

In addition to these financial details, it also contains a lot of other important data such as your:

  • Your address or places that you’ve lived 
  • Employment status
  • If you’ve been sued or arrested
  • If you’ve ever filed for bankruptcy

All of this information is what creditors, banks, insurers, and potential employers will use to determine if you’re a reputable candidate to do business with. Therefore, to put yourself in the best possible position to earn the highest score you can achieve, it’s absolutely critical that this information be accurate.

For example, think of what would happen if one of your creditors claimed you missed a payment but you had actually made it. Even if you and the credit card company resolve the situation, it’s possible that this claim could still be reported to the major credit bureaus. Whether it’s due to software or human error, that claim could have negative effects on your FICO score as well as your ability to qualify for a mortgage or car loan.

What Items Can I Dispute on My Credit Report?

Under the Fair Credit Reporting Act, you’re allowed to dispute anything on your credit report that is not accurate. It cannot be something that actually did happen and you’d like to see removed. It has to be a piece of data that either never happened or is being falsely reported.

Some common items include:

  • Inaccurate personal information such as the spelling of your name, address, birthday, social security number, marital status, employment history, etc.  
  • Financial transactions that never took place such as missed or delinquent payments, payments that did not meet minimum requirements, etc.
  • Status statements that aren’t true such as having an outstanding balance when you’re paid in full.
  • Duplicate items such as a delinquent account or payment that is shown twice.
  • Accounts that don’t belong to you (perhaps to someone else with the same name).

Additionally, you can also dispute those items that:

Again, the key is that the information must be 100% false, and not just things you wish had never happened.

How Do Credit Dispute Letters Work?

Filing a credit dispute letter is a little bit like making a formal complaint. You identify something that isn’t right on your credit report, and the credit agency launches an investigation of the situation.

The credit agency has 30 days to review your claim. During that time, the item you’ve called into question will be marked on your report as “in dispute”. Afterward, they will respond to you in writing and let you know what they’ve determined.

The best possible scenario is that the credit reporting agency will agree that there is a mistake. If so, then the next step will be that the error be corrected. You will then have to repeat this process for each of the three major credit reporting agencies:

  • Experian
  • Transunion
  • Equifax

Keep in mind that the credit reporting agency is not under any obligation to agree with every dispute you file. If you cannot provide sufficient evidence to demonstrate that the item is in error, they are allowed to reject your claim.

Here’s some good news: Filing a dispute does not in any way adversely affect your credit score or work negatively against you when you apply for future credit cards or loans. Therefore, if you truly believe there is a mistake, then you’ve got nothing to lose by sending one. 

Writing Your Credit Dispute Letter

If you’d like to move forward with writing a credit dispute letter, there’s here what you need to do: 

Before Writing Your Credit Dispute Letter

The first thing you’ll need to do is to identify what specific items in your credit report are incorrect. This can be done by going to www.annualcreditreport.com and downloading a free copy. You’re allowed to download one from each of the three major agencies every 12 months at no charge.

Many people have found that printing a copy of the report and going through the items line by line is an effective way to evaluate your report. Anything questionable should be highlighted and marked up with notes. This can also be digitally too if you prefer. 

For all of those items which you believe are in error,

  • Call the creditor if you are unclear. Sometimes you may think an account does not belong to you, but it could just be an old account that you don’t recognize. Also, check with your spouse to see if they potentially opened the account.
  • Collect documentation or evidence that proves the mistake. This might be a statement showing that the account was paid in full and on time. It might also be a letter from the creditor acknowledging the mistake.
  • Determine if the error appears on just one of the major bureaus reports or all three. Again, since each of the bureaus work independently, you’ll have to plan to file disputes for each one separately where the mistake appears.

What Should My Credit Dispute Letter Say?

Despite what you may think, a credit dispute letter does not need to be very long or overly formal. It should be straight to the point and communicate the following information:

  • Who you are
  • Who you’re writing to (which credit reporting agency)
  • Which item on your report you’re disputing
  • Why you believe it is incorrect and evidence you have to support your claim
  • A request to correct the disputed item or have it removed altogether

For a great example of what this letter would look like, please check out this helpful video here:

Can I Write a Credit Dispute Letter Myself?

Yes! In no way do you have to seek the help of a credit repair agency or lawyer to file a dispute. As long as you can prove the information is false, then you can file a claim right now.

This is a very important point to understand because if you’ve chosen to work with a credit repair company, then they are required to disclose this fact to you. If they try to tell you something else, then be aware that they may be trying to scam you.

Where Can I Send My Credit Dispute Letter?

Credit dispute letters can be sent to each of the following bureaus:

  • Experian: P.O. Box 4500, Allen, TX 75013
  • Transunion: P.O. Box 2000, Chester, PA 19016
  • Equifax: P.O. Box 740256 Atlanta, GA 30374

Can I Submit a Credit Dispute Online?

In our digital age and push to go green, most of the major credit bureaus now have online platforms where you can send your disputes to them directly via their website. Truthfully, this is a big help because it usually expedites the process and gives you a convenient place to check the status of your claim anytime you want.

What If My Credit Dispute Letter is Rejected?

If your dispute was rejected by the credit bureau, all is not lost. You can escalate your claim by making an appeal to the Consumer Financial Protection Bureau (CFPB). The CFPB is a regulatory agency that oversees financial products and services, and they might be able to intervene if you can provide concrete proof of the error.

When Will I See a Difference in My Credit Score?

The end-goal of a credit dispute letter is that you hope it will ultimately improve your credit score. However, be aware that not all changes will carry the same weight. For instance, removing an old foreclosure might drastically increase your rating whereas something such as correcting a misspelling to your address will have no impact.

If the change is significant, remember that it may take some time for your credit score to reflect this. FICO scores are only updated approximately every 45 days. Be patient and take comfort in knowing that you’re in a much better position now that the error has been resolved.

Don’t Want To Dispute Credit Charges Yourself?

There are a number of high-quality companies out there whose sole mission is to fight these battles for you. Our favorites are Credit Saint and Lexington Law.

The Bottom Line

Credit dispute letters are nothing more than simple formal requests to have errors corrected on your credit report. They can be helpful towards attempting to improve your credit score and ultimately your ability to qualify for loans. Although disputes are not guaranteed to improve your financial situation, they have no adverse consequences, so there’s no harm in using them to your advantage.

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