Errors on your credit report can tank your score and cost you thousands in higher interest rates. Disputing these mistakes is free and straightforward, but most people never bother.
You have legal rights under the Fair Credit Reporting Act. The three major credit bureaus—Equifax, Experian, and TransUnion—must investigate any errors you report within 30 days. Start by pulling your credit reports from annualcreditreport.com, the only federally authorized source for free annual reports from all three bureaus.
Look for red flags: accounts you didn't open, late payments that weren't late, incorrect balances, or accounts that should have fallen off your report. These mistakes happen regularly. Creditors report wrong information, bureaus merge files of people with similar names, or old accounts linger past the seven-year removal deadline.
To dispute, send a written letter to the bureau that reported the error. Include your name, address, account number, and a clear description of what's wrong. The Fair Credit Reporting Act requires written disputes, so skip the phone calls. Mail your letter to the bureau's dispute department address, which you'll find on their website. Keep copies of everything.
The bureau must investigate free of charge. If they verify the information is correct, they'll tell you. If they can't verify it within 30 days, they must remove it from your report. If the error came from a creditor, send a letter to them as well, disputing the inaccuracy.
This matters because a single error can drop your score 50-100 points. A lower score means higher mortgage rates, auto loan rates, and credit card rates. Over the life of a 30-year mortgage, a 50-point drop could cost you $20,000 or more in extra interest.
Don't pay for dispute services. Companies charging $100