Disputing Credit Report Information

The information in your credit report can affect many areas of your life, so it’s important to keep track of what’s in it. If you find information that is incorrect for any reason, it’s your job to dispute that information in order to have it removed from the report. Only you are looking out for your own credit rating, so it’s to your advantage to pay attention to your report.

There are actually three credit reports: from Experian, Equifax, and Trans Union. Monitoring all three of these credit reports is essential because the information can differ from report to report.

Follow this process to ensure your credit reports are accurate:

  1. Request your credit report. The fastest way to get a copy of your credit report is to visit AnnualCreditReport.com, where you’re entitled to receive a copy of each of your three reports for free once per year.
    • If you haven’t been following what’s in your credit reports, start out by requesting all three reports at once, because the information they contain can actually vary quite significantly, depending on who has reported what to them. The differences from one report to the next can amount to a significant credit score difference.
    • Once you’ve obtained and corrected past information in your reports, you can stay updated by spreading out your credit report requests to every 4 months. Simply request your report from one of the credit reporting agencies every 4 months, and over the course of a year, you’ll have received all three.
    • Of course, correct important mistakes in all 3 of them if you find an error.
  2. Verifying information accuracy. Comb over all three credit reports carefully in search of incorrect or inaccurate information. Any detail that isn’t right should be changed, even if it’s just a wrong address, because these pieces of information can have an impact on how lenders view you.
  3. Contact the credit reporting agency. If you find information that needs to be changed in your credit report, the next step is to contact the agency in charge of that specific report. It can take some time to dispute incorrect information, so the sooner you begin, the better.
  4. Writing a dispute letter. You can find sample dispute letters online that will give you a good starting point for writing this letter. Be professional and include all of the necessary proof that the information is incorrect so the credit agency can make the change.
    • Include copies of any documents that support your position. Do not include the originals.
  5. Disputing an item. Typically, the credit agency (Experian, Equifax, or Trans Union) will contact the company that reported the false information, and an investigation will follow to determine whether or not the information is inaccurate.
  6. Add accounts to your file. If not all of your credit accounts are being reflected on your credit file, then you may want to ensure that missing information is added. You can achieve this by contacting the companies that aren’t reporting your credit history and asking them to begin reporting for you.
    • Not every company is going to want to report this information for you, so it can take some time for you to have this information added to your account. However, if you’re diligent, you should be able to have the information added.
  7. Following up. Follow up on your requests if you don’t hear anything from the credit reporting company within 30 days, as this is the normal length of time for an investigation.

The power is in your hands to keep your credit report in good standing. If there is inaccurate information in your credit report, or if important information is missing, then take the steps to get the information corrected. Your next job, home, or loan may depend on it.

Creating a Debt Repayment Plan

When you don’t take steps to repay debt, it can grow into a force to be reckoned with. The reason is that debt collectors often assess additional fees and interest on the debt that you owe, so unpaid debts can become monstrous in short periods of time. Creating a debt repayment plan is essential to your financial health. 

Follow these steps for an effective and workable plan:

1.      List all of your debt. Write down everything that you currently owe money on, including debts that you repay monthly and debts that you’ve allowed to slip out of your conscious thoughts for a while.

 

·         Old debts that you’ve pushed aside have a way of coming back to haunt you, especially if you decide to apply for a mortgage loan or some other types of loans. So it’s wise to pay off all of your debt, not just some of it.

 2.      Rank your debts.Once you have a list of all of your debts, rank them in an order based on how you want to repay them. Some people choose the snowball effect, which entails paying down the smallest debts first, then moving to the largest.

·         Another good strategy is to pay off the debts with the highest interest rates first so that you’re not accruing a lot more interest while you’re working on other debts.
·         Both of these strategies are fine; ultimately, you want to choose the one that’s best for you.

3.      Determine your budget.Figure out how much money you can reasonably spend on debt repayment from month to month. Even if each debt is large, you can still pare them down by making monthly payments.

·         Be realistic about how much money you have to spend. Don’t take money away from other obligations to pay down debts – only use money that you have outside of your normal financial obligations.


4.      Create an emergency fund. If you don’t already have an emergency fund, now is the time to put one together. Save at least $1,000 before you begin paying down debt so you have money to fall back on in the event of a financial emergency.
5.      Pare down your first debt. Once your emergency fund is put together, start at the top of your debt repayment list and work down.
6.      Focus on a single debt at a time. Focus your attention on only one debt at a time rather than spreading your budget money out over numerous debts at once. The reason is so you can pare down and wipe out one debt after another, maintaining your focus and momentum.
7.      Put any extra money into savings. In the months when you find that you have extra money, consider putting it into your savings account or emergency fund.

As with any personal finance plan, your own experiences may vary depending on your debt and how much money you have to work with. Using these guidelines, design a plan that works well for your own situation, and soon you’ll be enjoying the many benefits of a debt-free lifestyle.