Credit repair services and credit monitoring services often make it a point to dispute negative items on your credit report. This is because negative information about your payment history, and inaccurate information about your credit habits, can damage your credit score. When you dispute these negative items, the creditor that reported them has 30 days to respond. If the reporting company does not, the credit bureau changes or removes the information, and you end up with a better credit score.
However, this credit tactic rarely works as planned. This is because disputing negative items is not a surefire way to have them removed from your credit report. When you dispute negative items, you are asking for a review of the item, checking it for accuracy. If the item is, in fact, accurate, then it will remain on your credit report. While the dispute will not lower your score further, it can represent wasted time and energy.
When and How to Dispute Negative Items on Your Credit Report
If your credit card company reported a late payment, and your payment was — in fact — late, disputing your report is likely to get you nowhere. Your creditor will simply check into it, say that your payment was late, and your report will remain the same. However, if your payment was not late, then you might want to dispute that information.
You should dispute negative items on your credit report when they are inaccurate. If something shows up as incorrect, whether it be your account balance, a duplicate account (this happened to me), a missed payment, or some other negative inaccuracy, you should dispute the item. Here are the steps to take when you dispute a negative item on your credit report:
- Gather documentation to support your claim, and make copies.
- Write a letter to the credit bureau, stating your name, address and Social Security Number, and explaining the reason for your dispute.
- Enclose your copies of your documentation with the letter. Make sure you keep a copy of the letter, and the originals of your documentation, in a safe place at home.
- Send the letter via registered mail so that you can be sure that the credit bureau received it.
- Contact your creditor directly. This can help speed things along. Let your creditor know (you can send the same letter and copies — never originals — of documentation via registered mail or by phone) what item you are disputing, and why. If you are right, your credit can change the reporting on it more quickly.
- Double check your credit report after 30 days. Credit bureaus must make their investigation with the time frame of a month. When 30 days have passed, you should double check your credit report to see that the negative item has been removed. Remember this 30 days does not start until the bureau receives your letter, so you give it a few extra days.
It is not always worth disputing negative items on your credit report — especially if they are accurate. However, if you find inaccurate information that is negatively impacting your credit score, it is in your best interest to dispute, and have the problem fixed as soon as possible.