There are two kinds of “bad” information on your credit report… there’s the stuff that actually happened, that’s “not positive” like a collection, or missed payment. Then there’s the “bad” information that is just plain ole “incorrect.” If you have incorrect/bad information on your credit report – you can request corrections.
Traditionally, folks in North Carolina thought that each incorrect item, needed to be dealt with individually… meaning you had to write a letter with each item that was wrong. These days, you should be able to dispute several items at once. What do I mean by “dispute several items at once?”
I looked at a report last week that had information from 2005 (4 separate items that all had opening dates of 2/2005) that needed to be removed. There was also a problem with an item in 2007. We only disputed the 2005 items in one letter – because, if you attempt to have the credit reporting agency correct everything at once, it may be easier for the agency to claim that your request is frivolous or irrelevant!
If you are disputing every item on your credit report (at one time) the credit reporting agencies might even make a note on your credit report that you are doing something that is fraudulent, or even unlawful. The Consumer protection guidance says that credit repositories are suppose to assume that all consumer disputes are “real,” unless there is clear and convincing evidence that it is not.
A blanket dispute, meaning when everything on your credit report is challenged, is like a big giant red flag waiving within the Credit Scoring System. The flagged items may be considered evidence that the dispute is fraudulent. If literally everything on your credit report is wrong, you have a huge problem, and you need to provide solid evidence about the specific issues on your report. For instance, if you and your children or your parents have the exact same name – and you suspect that another person’s credit is combined with yours, we need lots detail!
You should challenge erroneous items on your credit report – we’re not saying don’t do that, we’re just suggesting that you do it in ‘bite size” portions, and not send one letter with 52 items that you want to dispute. Collections can be especially difficult to fix, because the same collection can show on your credit report 5 or 6 times over time as the collection is literally sold from one company to another.
If the information they are reporting is inaccurate, incorrect, erroneous, misleading or outdated, they will have to remove it upon investigation. The specific law on disputes is found in United States Code, Title 15, Chapter 41, Subchapter III, § 1681i, entitled Procedure in case of disputed accuracy.
We recommend that you remove any personal items that are incorrect first (like addresses and names). We also recommend that you trace where a bad debt, that is then sold, and the balance and the dates change and change, and change originated. It’s difficult to settle something that has a history like that. If you are applying for a mortgage, and you have a fairly large balance on a collection account (over $1000) – the underwriters are probably going to require that you figure out how to make payment arrangements for it.
Be certain you write letters to each agency (ALL THREE!)! Going back to the case of my client who had 4 items in 2005 that were incorrect… keep in mind that you must specifically state in the letter that the information being reported is inaccurate or incomplete. Without using the correct language that says this specific item is being “disputed” or “challenged”, your letter might not be allowed by the Credit Bureaus as an exercise of your rights under the Fair Credit Reporting Act (FCRA).
Specific words to use in a letter of dispute include: “erroneous”, “outdated”, “misleading”, or “unverifiable”. Just stating why the payment was not made might be seen by the Credit Bureaus as a dispute and a “dispute” does not require the credit reporting agency to re-investigate the item. Explanations are, unfortunatly, not that useful – although actual disputes of information that is actually wrong can get results.
What you need to do is send copies of cancelled checks showing that you actually made the payments.