There are several reasons it’s beneficial to have a good credit rating. For one thing, it’s essential for getting a good interest rate when making a large purchase like a house or car. It will also help an entrepreneur get investment capital if he or she wants to start a business. In some cases, employers also look for people with good credit ratings because it means there is better chance that the candidate is a responsible person. Even some insurance companies will give cheaper rates to a client with a high credit score.
Credit scores can be low because the consumer doesn’t make timely payments on his or her debt. However, scores can also be low because of mistakes made by the people who report credit as well as by the credit bureaus. According the Federal Trade Commission (FTC), one in five consumers has errors on their credit report. If an individual believes there is a mistake on his or her credit report, it should be addressed as quickly as possible with a credit dispute letter. The most common signals that the person may have a dispute are a sudden drop in their credit score for no apparent reason and an unexplained delinquency of payment for something the person didn’t buy.
All three of the main credit bureaus, TransUnion, Equifax and Experian accept disputes that are filed online, and Experian only accepts online submissions. If it isn’t convenient or possible to file a dispute online, the individual should send a credit dispute letter through certified mail.
Some other reasons to send a dispute letter by mail are:
• If the dispute doesn’t fit into the dispute categories online
• If the consumer gives up their rights if they dispute online
• If the consumer has written proof of the mistake
• If it is the second attempt of the consumer to get it right
If the business that furnishes the credit status to the credit bureaus has made a billing mistake, the dispute can be taken up with them. They need to send notice to each of the three credit bureaus about the mistake and ask that it be removed. If the incorrect information doesn’t belong to the consumer or is a wrong address or incorrect public record, the three credit bureaus need to be sent a credit dispute letter.
The letter should include:
• Identification numbers including the last four digits of the Social Security number, the credit report reference number, the consumer’s name and address.
• The item that is incorrect needs to be clearly identified. Usually, a copy of the incorrect credit report is included with the letter with the mistakes highlighted.
• The reason for the dispute should be mentioned at the beginning of the letter and the whole letter should be only one page. The letter should be brief and to the point.
• There is no need to quote the Fair Credit Reporting Act (FCRA). The credit bureaus know what to do.
• If the consumer has previously tried to solve the dispute and had no positive response, they can put a cc to the Better Business Bureau or Consumer Financial Protection Bureau at the bottom of the letter and also send copies to those agencies.
If the consumer doesn’t get a positive response within 30 days, they may want to escalate the dispute. All records of correspondence connected with the dispute should be saved including credit reports, receipts, emails and online responses should be saved in a file in the event the consumer needs to consult a consumer law attorney.
Below are sample credit dispute letters that can be sent by mail. It should be sent by certified mail because then the consumer will get proof that the credit agency received the letter and when they received it. Any enclosures such as bills or credit reports should be copies with the mistake highlighted. No original documents should be sent.
Sample 1 - Credit Dispute Letter
Name of Consumer
Last four digits of SS number 1234
Address of Consumer
City, State, Zip Code
Name of Credit Bureau
Address of Credit Bureau
City, State, Zip Code
REF: Account or Report Number
To Whom It May Concern:
This letter is a formal dispute of the information on my credit report that my mortgage payment to Name of Lender for the month of MONTH of AMOUNT was 30 days late.
Enclosed is my cancelled check for that payment as well as my bank statements for the three months prior to the date and three months after the date. It is clearly shown in the statements that my payment was not late.
Please correct this mistake as soon as possible on my credit report and send me an updated copy when the information is correct.
Thank you for your quick attention to this matter.
Signature of Consumer
Printed Name of Consumer
Sample 2 - Credit Dispute Letter
Writer's Address: Address, City, State, Zip Code
Attention: Complaint, Credit or Billing Department [whatever is more appropriate]
Company's Address: City, State, Zip Code
To Whom It May Concern:
I am writing to dispute the following information in my account. I have circled the items I dispute on the attached copy of the report I received.
This item [identify item(s) disputed by name such as: creditors or tax court. Also, identify type of item, such as a credit account, judgment, etc.] is [inaccurate or incomplete] because [describe what is inaccurate or incomplete and why].
I am requesting that the item be removed [or request another specific change] to correct the information.
Enclosed are copies of [use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents] supporting my position. Please investigate this matter(s) and [delete or correct] the disputed item(s) as soon as possible.
By Andre Bradley