What to Do When a Debt Is Unfairly Reported to the Credit Bureaus?

Benefits

The Fair Credit Reporting Act requires the credit bureaus to accept and investigate consumer disputes regarding incorrect information within their credit files. Although each credit bureau provides you with the option to file a formal dispute online or by phone, the Federal Trade Commission recommends sending in your dispute via mail. By mailing in your dispute, you can provide additional documentation to support your claim that the entry in question is actually inaccurate.

While the credit bureaus maintain the information within your credit history, the data your credit files contain is provided by your creditors. As of July 2009, consumers have the right to file disputes directly with their creditors. Although the credit bureaus investigate all disputes with the creditor that originally reported the information, a consumer dispute letter sent directly to the creditor provides it with more thorough information and is more likely to lead to a correction.

If the information that was unfairly reported to the credit bureaus in your name appeared as a result of identity theft, the Fair and Accurate Credit Transactions Act gives you the right to demand that all three credit bureaus immediately bar the information from appearing on your credit report. You must provide the credit bureaus with a formal dispute letter and a copy of the identity theft report proving your claim to have the erroneous accounts immediately deleted.

A creditor's unwillingness to remove or correct an inaccurate report to the credit bureaus leaves it subject to a lawsuit for noncompliance with the FCRA. If disputing with the original creditor and the credit bureau proves unsuccessful, sometimes notifying the creditor of your intent to sue based on its failure to correct erroneous information is sufficient to have the entry removed from your credit record. Otherwise, you have the right to file a formal lawsuit against the company.

Many consumers struggle with negative information on their credit reports that seems unfair but is, in fact, correct. While derogatory reports may appear unfair, they actually help lenders make more informed decisions regarding your dependability. Most negative information disappears from your credit report after seven years.