Disputing Inaccuracies on Your Credit Report

Earlier this fall, in the midst of looking for a rental property to purchase, I had the unpleasant discovery that there was an inaccuracy on my credit report: when my student loan was purchased last December by a bank named Mohela, Federal Direct Loans apparently neglected to report my loan as paid off, meaning my credit report showed that I owed twice as much in student loans as I actually do.

After a panicked call to our bank, I discovered that the apparent inaccuracy occurred because one of the three credit bureaus had not updated those account balances since October of 2011, and that all three bureaus showed no activity or updates on my original student loan since last year. Basically, the correct information is there, it just hasn’t been completely updated—and my report and score are both fine.

This experience got me wondering about what types of inaccuracies do require action. Here are three credit report errors that you should always dispute:

Incorrect Personal Information

We may think of the credit bureaus as monolithic organizations, but they are staffed by human beings just like us—which means they make mistakes. If you find incorrect addresses, accounts, or even wrong details in your name—like the wrong middle initial, for example—what has probably happened is that you have been confused with someone with a similar name.

The other issue with incorrect personal data is when the report has out-of-date information, like an address you have not lived at for several years.

In either of these cases, you need to alert the agency that originated the error, and follow up your phone call with a written notice of the error. Even if the error only appears on one credit bureau’s report, you will want to also notify the other two because information is often shared between the three.

Bad Debt That’s More Than Seven Years Old

We all know that old accounts can fall off of credit reports, but positive accounts are allowed to stay on indefinitely—and they can only help your credit. But delinquencies and charge-offs need to disappear after seven years, as does bankruptcy. In addition, if you have declared bankruptcy, your debts that were discharged through the process should be removed from your report.

In both of those cases, you will need to alert the credit bureaus that the information needs to be removed. In the case of debts discharged through bankruptcy, you will need to pass along your bankruptcy paperwork to both the creditor and the bureaus to show that they should not be on your report.

And as frustrating as it may be, you will likely have to do this more than once before you see results.

Cancelled Credit Cards That Incorrectly Claim “Closed by Grantor.”

When you cancel a credit card, it should not have a severely negative effect on your credit. But credit cards that were cancelled by the creditor really do hurt your score.

If you cancelled your account but the credit bureaus seem to think it was your creditor who initiated the cancellation, you will need to get back in touch with your former issuer. Ask them to look over their records and re-report to the credit bureaus. You will need to keep a close eye on your report for a few months to make sure that your issuer took care of the problem.

The Bottom Line

Credit reporting is not an exact science, but it can have a devastating effect on your finances. It pays to stay on top of your credit report and make sure that inaccuracies are taken care of. After all, no one will care as much about your credit as you do.