If you’re like most people, you probably don’t give your credit report much thought—that is, until you’re trying to get a loan or credit card and are suddenly denied. If this has happened to you, it’s natural to wonder what’s on your credit report and whether or not there are ways to improve your credit score.
One of the most common questions we get from our clients is whether or not disputing credit reports will hurt their scores. The answer is: it depends.
How Disputing Credit Report Works
When you dispute an item on your credit report, you are asking the credit bureau to investigate the accuracy of that information. The credit bureau then contacts the lender or creditor who supplied the information to verify its accuracy. If the information cannot be verified, it must be removed from your credit report.
What Happens to Your Score When You Dispute an Item on Your Credit Report?
There are a few things that can happen to your score when you dispute an item on your credit report. First, if the dispute results in the removal of the contested item from your credit report, your score will likely go up.
Second, if the disputed item is verified as accurate, your score may go down temporarily while the investigation is taking place. However, once the investigation is complete and the disputed item remains on your credit report, your score should return to its previous level.
The Case Against Disputing Credit Report Information
One of the main arguments against disputing credit report information is that it can actually hurt your score – at least in the short term. Experian reports that when you file a dispute, the bureau will temporarily remove the disputed item from your report while they investigate the matter.
This can cause your score to drop because you suddenly have less positive information on your report. Additionally, if the bureau finds that the disputed information is accurate, your score could take another hit because you now have a “dispute record” attached to your file.
So, if you decide to dispute information on your credit report, you need to be prepared for the possibility that it could negatively impact your score – at least in the short term.
The Case For Disputing Credit Report Information
On the other hand, there are some good reasons to dispute information on your credit report- even if it might hurt your score in the short term. First and foremost, if there is inaccurate or incomplete information on your report, disputing it is the only way to get it fixed.
Additionally, even if the disputed information is accurate, disputing it could still be beneficial in the long run. That’s because once you dispute an item on your credit report, the bureau has 30 days to investigate and determine whether or not the information is accurate.
If they can’t verify it within that time frame, they have to remove it from your report entirely – which can have a positive impact on your score.
How To Dispute Inaccurate Information On Your Credit Report
1. Check for errors
The first step in disputing inaccurate information on your credit report is to check for errors. Errors can include incorrect account information, incorrect balances, and incorrect payment history. If you find any errors on your credit report, you should dispute them with the credit bureau that issued the report.
2. Gather supporting documentation
The next step is to gather supporting documentation that proves the inaccuracies on your credit report. This can include bank statements, canceled checks, and receipts. It is important to have as much documentation as possible to support your dispute.
3. Write a letter to the credit bureau
Once you have gathered your supporting documentation, you need to write a letter to the credit bureau that issued the report. In the letter, you should include your name, address, and Social Security number.
You should also explain why you are disputing the information on your credit report and provide copies of your supporting documentation.
4. Send your letter by certified mail
After you have written your letter, you need to send it to the credit bureau by certified mail. This will provide you with proof that the credit bureau received your letter.
5. Wait for a response from the credit bureau
Once the credit bureau receives your letter, they will investigate your dispute and determine whether or not the information on your credit report is accurate. If they find that the information is inaccurate, they will remove it from your credit report.
6. Follow up with the credit bureau if necessary
If you do not receive a response from the credit bureau within 30 days, you should follow up with them to ensure that they received your letter and are investigating your dispute
As you can see, disputing an item on your credit report can have both positive and negative impacts on your score. While disputing an item on your credit report can temporarily lower your score, it is important to remember that accuracy is key when it comes to maintaining a good score.
If an item on your report is inaccurate and you are able to prove it, removing the negative mark can actually help increase your score in the long run. However, if an item is verified as being accurate, it will be added back to your report and could cause a dip in your score. Therefore, it’s important to only dispute items that you are confident are inaccurate before taking any further action.
If you’re thinking about disputing an item on your own credit report, we recommend speaking with a professional first to get their opinion on whether or not it’s worth it for you. After all, nobody knows your financial situation better than you do!