How to Read Your Credit Report and What Is Worth Disputing
The report holds the data your score is built from. Four sections, and errors cluster in two of them.
Your credit score is a summary. Your credit report is the source material, and it is the thing worth reading, because you can dispute what is in the report and you cannot dispute a score.
Federal law entitles you to a free copy from each of the three nationwide bureaus. You request them through the official annual credit report service, the one authorized under federal law. Sites that ask for a card number to show you a free report are selling something else.
Pull all three, not one
Equifax, Experian and TransUnion each build their own file. Lenders choose which bureaus they report to, and plenty report to fewer than three. An account can appear on one report and be missing from another without anything being wrong.
This is why an error you fixed at one bureau can still be sitting at the other two. Disputes do not propagate. You handle each bureau separately.
The four sections
Identifying information. Name, current and former addresses, date of birth, employers. Errors here are common and mostly harmless, though a name or address you do not recognize is worth attention, because it can indicate someone else's file merging into yours or an account opened in your name.
Accounts. The bulk of the report and the part that drives your score. Each account shows the creditor, account type, date opened, credit limit or original loan amount, current balance, payment status and a month-by-month payment history.
Public records. Bankruptcies. Judgments and tax liens no longer appear on consumer credit reports under the reporting standards the bureaus adopted, so this section is often empty.
Inquiries. Hard inquiries from lenders you applied to, visible for two years. Soft inquiries, including your own checks and promotional screening, appear only on the copy you pull and are not visible to lenders.
Where errors actually cluster
Two sections produce nearly all the disputes worth filing: accounts and identifying information.
- An account that is not yours. Either a mix-up with someone of a similar name, or fraud. Both need action, and fraud needs it fast.
- A late payment you did not make. Check your own bank records before disputing, since the payment date the creditor recorded may differ from the date you sent it.
- A wrong credit limit, or a limit reported as blank. A missing limit can distort your utilization calculation, sometimes badly.
- A closed account reported as open, or an open one reported as closed. Both affect your available credit and your history length.
- A balance that is wrong, particularly a paid-off debt still showing a balance, or a debt appearing twice because it was sold to a collector and the original creditor never updated.
- An account that should have aged off. Most negative information drops after seven years. Chapter 7 bankruptcy can remain for ten.
Worth knowing
A debt appearing twice, once from the original creditor and once from the collector who bought it, is a specific and fixable error. The original account should show a zero balance and a status reflecting that it was transferred or sold. Two live balances for one debt counts against you twice.
How to dispute
You dispute with the bureau reporting the error, and you can also dispute with the creditor who supplied the information. Doing both tends to resolve things faster.
Be specific. Identify the account, state exactly which field is wrong, state what it should say, and attach evidence: a statement, a payment confirmation, a letter from the creditor. "This account is wrong" gets a slower and worse outcome than "the limit on account ending 4417 is reported as $2,000 and the attached statement shows $8,000".
The bureau generally has 30 days to investigate, extendable to 45 in some circumstances. It contacts the creditor, and if the creditor cannot verify the information, the bureau removes or corrects it. You get a written result and a free copy of the updated report.
Keep records of everything you send and when. If a dispute fails and you still believe the entry is wrong, you can escalate to the creditor directly, file a complaint with the federal consumer protection regulator, or add a brief statement of dispute to your file.
What you cannot dispute away
Accurate negative information stays. A late payment you actually made late, a charge-off that happened, a bankruptcy you filed: these remain for their reporting period regardless of how the dispute is worded. Any company promising to remove accurate items is describing something it cannot do.
What you can do is make sure everything on the report is correct, and let the accurate negatives age. Their weight fades well before they drop off.
This article is general information about how consumer finance products work in the United States. It is not financial, tax or legal advice and is not a recommendation of any specific product or provider. Rules and pricing vary by state and by institution.