There are many strategies when it comes to disputing derogatory information on your credit report(s). You can find dozens of different ideas and samples on the internet, or you can hire a credit repair professional or a lawyer. The Big 3 credit bureaus, (Equifax, Experian and Transunion), allow you to file your disputes on their respective web sites if you wish. I've seen disputes of all kinds: disputes that quote the law, disputes that are threatening, disputes written in crayon, disputes that are long and short, and disputes that I don't even understand. The fact is, any of these may achieve the goal of correcting or deleting a derogatory trade line. But your odds are much better if you use this four-step process.
- BE CLEAR ABOUT EXACTLY WHAT IS INACCURATE
It is important to explain in summary fashion precisely what is wrong with the reporting that you challenge. If you were never 30 days late on a payment, you should say: “you are reporting me 30 days late on XYZ account, and that is not accurate”. If the inaccuracy involves a more complex issue like an incorrect charge-off, bankruptcy, incorrect balance, etc., you may have to use a few sentences to explain what is inaccurate about the reporting. The way to drive this point home is to enclose the one page of your credit report that contains the problem, and actually circle or highlight the “30 days late”. Then be sure to reference the one page, by saying: “I have enclosed a copy of my credit report with the XYZ account, and I circled the inaccurate reporting for your easy reference”.
- EXPLAIN WHY THE REPORT IS WRONG
This can be very simple or very detailed depending on the inaccuracy you are disputing. Using the example above, this is very easy. You can just say: “you are reporting me 30 days late on XYZ account, and that is not accurate, because I was never 30 days late”. However, if you are disputing something more technical like date of first delinquency, payment history, etc., your dispute must demonstrate why these items are wrong. For instance: “you are reporting XYZ account with a $500 balance. This is not accurate "because this account was transferred to another credit card account and closed with a zero balance in May of 2014”.
- SHOW THEM WHY THE CREDIT REPORT IS WRONG
Enclose evidence to prove you are right and the reporting is wrong. Using the example above you could say: “you are reporting me 30 days late on XYZ account, and that is not accurate, because I was never 30 days late”. I have enclosed my bank statements and highlighted the payments I made to XYZ for the past three years. As you can see, there are no late payments to XYZ”. Again, if you have a more complex dispute, you can and should attach any and all documents that tend to prove you are correct. This could include mortgage documents, bankruptcy filings, letters, account statements, receipts, tax returns, etc. (Always be sure to black out account numbers and other sensitive information on your attachments).
- SEND YOUR DISPUTE BY CERTIFIED MAIL
Occasionally, the Big 3 will make a mistake and never even respond to your dispute. They might argue that they never received your dispute in the mail. How can you avoid this problem? Send it certified!, by return receipt mailing so their receipt of your letter is documented. This will cost you some money but it's well worth it. Trust me, when you receive that stamped green card in the mail confirming the credit bureaus received your dispute and signed for it, you will feel a sense of relief. It's worth every penny. Moreover, you will now have the actual date they received your dispute. Since they have 30 days to investigate and respond to you, there will be no doubt as to the deadline.
In Sum: What, Why, Show, Certify
- What is inaccurate?
- Why is it inaccurate?
- Show the “Why” with proof
- Send it certified
WHAT IS SO SPECIAL ABOUT THIS FOUR-STEP PROCESS?
Following the “What, Why, Show, Certify” method allows you to organize your dispute letter so that it is very simple to complete and understand. But far more important is the legal effect of a dispute utilizing this method. Credit bureaus and creditors must conduct a “reasonable investigation” when they receive your dispute to comply with the Fair Credit Reporting Act, (“FCRA”). When you receive the credit bureau response to your dispute, one of three things generally happen: 1) They correct the inaccuracy; 2) They delete the account entirely; or 3) They determine that the credit reporting IS accurate and tell you it will remain the same.
The legal effect of your letter is powerful if the credit bureau wrongly determines that the reporting is accurate, when in fact it is not. You have now clearly explained your position and showed them with documentary evidence. Plus, you sent it by certified mail, so they cannot deny receiving it. You have now opened the door for liability and damages under the FCRA. How could they have conducted a “reasonable investigation” if you provided all the proof and evidence of the inaccurate credit reporting? You now may be entitled to damages for their violation of the law, including money damages, correction of the derogatory trade line, along with attorney fees and court costs.
In sum, you should strive to organize your dispute. As a lawyer, I can best represent you in a FCRA lawsuit if your letter follows the “What, Why, Show, Certify” method. If you are interested in correcting your credit, and at the same successfully protecting your legal rights in the event the Big 3 do not comply with the law, I highly recommend that you dispute the correct way.