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Your credit score is your golden ticket to lower interest rates, higher credit limits and bigger purchases like a house or car. Bad credit can hang over you like a cloud, affecting whether or not you can make that purchase, and sometimes even affect your job.
The good news? Credit scores fluctuate and there are ways to bring yours up. In fact, 1 in 5 people have an error on their credit report.
If you’re one of them, you’ll want to learn how to use credit dispute letters to quickly resolve any errors. By fixing these errors, you could see your score shoot up.
Here’s what you need to know to get started.
How to Find Errors on Your Credit Report
If you noticed an error on your credit report, it will stay there until you formally dispute it with the credit reporting agencies. This is why you should regularly check your reports to make sure everything is accurate.
The good news is this doesn’t have to cost a dime.
The three credit reporting agencies, Equifax, TransUnion, and Experian, are required to provide you with a free credit report once a year. Once you have your reports, look over it for any accounts that aren’t familiar.
You’ll also want to search for accounts with inaccuracies such as late payments. If you have proof you made all payments on time you can successfully dispute those.
It’s important to obtain a report from each of the credit bureaus because an error that appears on one report may not be on another.
How to Write Credit Dispute Letters
When writing your letter be as specific as possible and include evidence of on-time payment are accounts that were paid in full.
You’ll want to format this like a formal letter. Include your name, address, the last four digit of your social security number. Add a reference line where you’ll list the name of the creditor and your account number.
The letter should be straightforward and explain that you are disputing an item and list the reason why. You’ll also want to mention that the company has 30 days to respond to remain in compliance with the Fair Credit Reporting Act (FCRA).
If you have evidence to support your dispute, attach it with the letter.
How to Send Your Letter
The credit bureaus make it easy to dispute accounts by doing it online. However, this may not be the best way, particularly if you’re disputing multiple items. To keep track of your disputes and document the start of the 30-day countdown, send your letters via certified mail.
This way you’ll get notified once the creditor receives your letter and you’ll have solid proof if 30 days pass by with no response.
If you don’t hear from them after the 30 days, your next letter will be to the credit reporting agencies to report that the creditor has violated the FCRA. The account must then be updated or removed.
The process of creating and sending multiple letters can be tedious. That’s why we recommend that you create an account with disputebee to streamline the process.
Continue to Check Your Reports for Errors
Once you’ve sent your credit dispute letters, continue to check your credit reports for updates. Once an inaccuracy is removed, you’ll see the changes reflected in your credit score.
After you’ve successfully disputed inaccurate accounts, regularly keep an eye on your reports to prevent other mistakes from popping up and wreaking havoc on your credit score.
Check out the rest of our site for more hacks and personal finance tips to help you manage your credit.