What Can You Do When A Creditor Reports Incorrectly On Your Credit Report?

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

This blog is the second in a two part series I began yesterday.  The first blog yesterday was How Long Does Information Remain On A Credit Report?  Today's blog is on how to correct errors on a Credit Report.  It is not unusual to find creditors reporting items incorrectly, and that is not the kind of SURPRISE anyone wants to see when they are reviewing their Credit Report.  So What Can You Do When A Creditor Reports Incorrectly On Your Credit Report?

When I am reviewing a Credit Report with a Borrowers, and one of their Creditors has incorrectly reported a:

  • Late Payment
  • Collection
  • Judgment

I first instruct the Borrower to contact the Credit Reporting Company I use, Strategic Information Resource, and they assist the Borrower in making the necessary disputes to correct how the item(s) is being reported on their Credit Report.

Most Creditors report monthly to all three Credit Bureaus Equifax, Experian, or TransUnion.  Therefore, the dispute needs to be submitted to all three in order to correct the mistake and adjust the Credit Scores.  I instruct the Borrower to send proof the item(s) were paid to Strategic Information Resource, and Strategic Information Resource will file the dispute on the behalf of the Borrower with all three Credit Bureaus.

However, those who are not applying for a Mortgage and therefore do not have access to this service, then the following is What Can You Do When A Creditor Reports Incorrectly On Your Credit Report?

  • You will need to write a letter of dispute to each of the three Credit Bureaus Equifax, Experian, or TransUnion along with proof the items you are disputing are being reported incorrectly. The letter needs to include the Trade Line, Account Number(s), and reason why you believe it is reporting incorrectly.
  • Under the Fair Credit Reporting Act, each Credit Bureaus must contact the Creditor or person the dispute is being filled against within 5 days of the receipt of the request. The Creditor or person the dispute is filled against then has to give a written reply back to the Credit Bureaus within 30 days of the date the dispute was filled.
  • The Credit Bureaus then have 5 days from receipt of the creditor's or person’s written reply, to provide a written report with their findings. They will also need to provide a copy of a revised Credit Report if changes were made.

So what happens if the procedure above is not followed? There are 3 possible scenarios:

  • No response from the Creditor or person the dispute is filled against.  If that happens the data is removed.
  • The Creditor or person that the dispute is filled against shows proof they are correct.  If that is the case the data remains.
  • The Creditor or person the dispute was filled against acknowledges they were wrong or partially wrong, and they correct the item(s) they are reporting incorrectly.

In each of the above scenarios the person who submits the dispute must be notified by the Credit Bureaus of the results, but there is one little twist to the first scenario. If the Creditor or person who the dispute was filled against does not respond within the required time period, and the correction is made as a result of that, the error can still show up later if the creditor at a later date decides to reports the item again.  So if the correction is made because the Creditor or person the dispute was filled against did not respond, the person who submitted the dispute must continue to monitor their Credit Report, because the error could show up again at a later date.

Everyone is entitled to one free Credit Report per year from each of the Credit Bureaus.  It is wise to take advantage of this every year, so if a Creditor is reporting something incorrectly, or if fraud is going on, it can be addressed quickly.  Now that you know What You Can Do When A Creditor Reports Incorrectly On Your Credit Report, all you need to do is just follow the above proceed if it happens.

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum,# Haddam,# East Haddam,# Chester,# Deep River, and# Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & a #FL Licensed Lender who can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

Comments (46)

Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Thank you for the great information that we can pass on to our readers. As always, I will reblog shortly! :)

Aug 20, 2013 04:31 AM
Matt Kombrink
RE/MAX All Pro - Saint Charles, IL
Your #1 Source For Real Estate

Excellent information here, George.  I'm sure you covered several points that consumers are wondering.  Your advice will be put to good use!

Aug 20, 2013 04:37 AM
Brian DeYoung
also affiliated with Howard Hanna - Ithaca, NY
The Realtor with personal investment background

I have had good success protesting errors and having them removed.

Aug 20, 2013 06:06 AM
Toni Bird
Coldwell Banker Preferred Properties - Hoover, AL

Wonderful post. Very straight forward directions.

Aug 20, 2013 06:13 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Excellent information you provide here, George ... as always.  Thorough and easily understood and followed.  Anyone hoping to make such a report will be successful, should they follow your advice and instructions ...

Gene

Aug 20, 2013 06:56 AM
Robert Adams
Broker at The Adams Team at Rothwell Gornt Companies in Las Vegas & Sankey Real Estate in MA - Las Vegas, NV
Real Estate Broker in NV, MA, & RI

Good info. A lot of people can bebefit from this I am sure!

Aug 20, 2013 07:32 AM
Jimmy Faulkner
Florida. Homes Realty & Mortgage - Wantagh, NY
The Best Of St. Augustine

Excellent information that I am going to pass on the people who need it. I quess you have to engage the credit bureaus in order to get things cleaned up.

Aug 20, 2013 08:44 AM
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, really good information for lots of people suffering the consequences of inaccuracies of creditor reports.  It can be such a frustrating time dealing with creditors and the credit bureaus...S.I.R. sound like a big help.

Aug 20, 2013 08:56 AM
Randy Mitchelson,APR
Marketing Advisor & Squeeze Mortgage - Bonita Springs, FL
First Impressions are made at First Click

I like to suggest to clients that they utilize the automatic calendar reminders in their email program like Microsoft Outlook to schedule when the expiration dates are for the creditors and credit bureaus to reply within FCRA guidelines.

Aug 20, 2013 11:13 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

George -- I had the unfortuanate situation to have an allergy doctor charge me for shots I never got.  He then sent the whole thing to collection.  I contested the charges and wrote letters.  Several years later I wanted to refi on my mortgage and there was the deificiency on the report.  I could not prove I paid, because I never received the services.. The allery doctor was long gone, but he lender made me write a check for the full amount.  I wanted to refi so I finally gave in.  Several YEAR later, I was reimbursed.  Clearly, it is very difficult to contest something like this.

Aug 20, 2013 12:54 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great information, George, and I will definitely reblog. Dealing with the credit reporting companies is a nightmare so often.

Aug 20, 2013 08:54 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

George, thanks for the information. Good to know that items incorrectly reported can be changed.

Aug 20, 2013 10:23 PM
Graziella Bruner
NCS Premier Real Estate - Detroit, MI
Associate Broker - Serving Wayne & Oakland County
Excellent post and great information for the consumer. I believe we all need to take the time and go over our credit reports and make sure it's correct.
Aug 20, 2013 10:46 PM
Trent Dalrymple (248) 854-0625
Texana Bank - Bloomfield Hills, MI
Allowing Mortgage Professionals to Lend Nationwide

My suggestion to my clients has been to annually request a free copy of your credit reports from all 3 bureaus from the Federally Mandated web site www.annualcreditreport.com.  You can download each report through this site and begin the process of correcting any inaccuracies by sending a letter of dispute to each of the bureaus accompanied by proof of your identity (copy of your driver's license and social security card) and keep responding to each of your updated reports if they're not correct.  Staying on top of your credit history will keep misinformation from showing up on your reports (and isn't it usually when you or your clients have just appled for a home loan?)

Aug 21, 2013 12:29 AM
Jeanne Woodward
Movement Mortgage, LLC - Reisterstown, MD

Great information... Thanks for sharing. As a loan officer, i see this all to offen, however like you stated, it can be corrected, but does take time. Everyone should check their credit report yearly.

Aug 21, 2013 01:20 AM
Jeff Stevens
Berkshire Hathaway HomeServices New Mexico Properties - Las Cruces, NM
Jeff Stevens, Associate Broker/REALTOR

This is great consumer information. Thanks as always, George. Good second post on this subject. 

Aug 21, 2013 01:41 AM
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Great information to pass onto clients who may have this issue on credit reports.

Aug 21, 2013 02:11 AM
Team Honeycutt
Allen Tate - Concord, NC

Great information on correcting incorrect problems on a credit report is good to know.  I think getting a credit eeport corrected is a difficult process.

Betty

Aug 21, 2013 04:46 AM
Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

When I bought a home about 15 years ago I found out I had been turned over to a collection agency for a $25 ambulance ride that I had never been billed for when I was in the hospital. Got it fixed but it was certainly a pain.

Oct 25, 2013 02:09 AM
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

Yeah its never an easy task but one defintely worth putting in the effort as old and error items can haunt for a long time

Oct 25, 2013 10:27 AM