Have you ever received your credit report and thought something doesn’t quite stack up? Do you have a marked flag which you fundamentally disagree with? Whilst credit report errors are infrequent, it’s important that you have the right to dispute any inaccurate information. Here are some pointers to help you with any dispute that may arise.
Step 1 – what exactly is an error?
An error is incorrect information on your report that frankly shouldn’t be there. Sometimes credit agencies misrepresent information, in basic terms the information isn’t your own, it’s either been incorrectly reported, or it’s against the law to be listed. Errors can include:
- A missed or late payment older than 5 years
- Having a credit card or loan listed that isn’t yours
- An account which was closed by you, but its actually listed as closed by the credit provider
Negative mark errors
- A settled collections account still showing as unpaid
- A paid tax lien that is more than 7 years past the date of payment
- The account which was discharged in bankruptcy is still showing as active with a balance intact (account history can still be reported)
Incorrect personal information
- The wrong name listed
- The address listed where you’ve never actually lived or used as a mailing address
- Inaccurate employer information
- Inaccurate employer details
Just because your credit report is missing some information, don’t panic because it doesn’t necessarily mean there is an error. Some information may only be reported to one credit bureau and not all of them. It could also be that the latest changes to your credit haven’t yet been updated in their systems, and therefore reflected in your credit report due to the typical processing times.
Account related and negatively marked errors may affect your score, which could have a detrimental effect on whether you’ll qualify for credit in the near future, like a loan or credit card. In most cases, errors in personal information don’t influence your score, however, they could impact your ability to receive alerts around fraud or reporting issues.
Step 2 – Review your credit reports
How exactly are credit reports created? Well, the basis is that certain financial services including loan providers, credit card issuers and debt collection/consolidation agencies, may choose to report your financial information to one or more credit bureaus (depending on who they are affiliated with). The credit bureaus collect this information and are legally allowed to seek out public records to put together the information in order to build a file on you in the form of a report. The three main national credit bureaus in Australia, (Illion, Equifax and Experian). They can share your information with prospective credit providers or companies that have legal grounds to request it. Credit bureaus and data companies are subject to regulations, such as the Australian CR Act 2014 (Credit Reporting), to maintain that the information on your report is accurate.
How do I get a credit report?
Every Australian is entitled to one free credit report annually. If you have already utilised your free reports for the year, you can still gain access to reports directly through the credit bureaus or alternatively through third party offers. These are websites that cross-sell the credit reporting products on behalf of the bureaus. You might be able to access an additional free report based on the below:
- You’re denied credit because of information on your credit report
- You feel your credit report contains inaccurate information because of identity theft in the past
- You are unemployed and want to apply for a job within the next 60 days
Once you have the reports, you should review them thoroughly for any errors. An error may not be reflected in your reports from all the three credit bureaus, so make sure you check each report.
Step 3 – what to do if you notice an error
In the scenario of finding an error on your credit report, the next steps may depend on the type of error. If its an error on a late payment that shouldn’t be there, you should take it up directly with the credit provider. Simple errors are easy to rectify, and it might just be a basic error that is the reason for the lower than ideal score you’ve received. If there is a lack of resolve with the provider directly, you have the option to file a dispute with the credit bureau directly.
You can also dispute with both the credit bureau and the data company where you know your information is held. This could well speed up the process. Don’t forget to explore the option for filing a dispute online, as this normally involves less administration and a faster processing time.
Step 4 – follow up with your dispute
A dispute will typically take around 30 to 45 days of receiving notification to review. Within this time the bureau or data company should notify you of the result. With the majority of the credit bureaus, typically about 65% of disputes are resolved by no longer than 15 days.
Did you file a dispute with the credit bureau? Should the error be related to any personal information, public records or inquiries, credit bureaus can look into the issue themselves as the onus is on them to provide the most accurate and updated information. In some instances, the credit bureau doesn’t need to involve you with the data company or furnisher, as the bureau will send the query directly to the company that provided the information to the bureau, like the lender or credit issuer. The data company will investigate the dispute and report back their findings to the bureau. If your credit report is requested while a dispute is happening, the information involved in the dispute should be highlighted to reflect that.
Did you lodge a dispute with the data company? They should investigate the dispute and report back to you. If your report is requested while a dispute is in motion, the information involved in the dispute should be marked to reflect that when the company sends their updated reports to the bureau.
What happens if your dispute results in a change?
It doesn’t matter where you filed your dispute. Should it be the data company or the bureau, they must update their records with the dispute marked. A credit bureau has to provide an updated free credit report in the event of a dispute if it was changed because of an investigation. Also, at your request, the credit bureau can send notices of any corrections made to your credit report to anyone who received it in the last six months (two years for your places for employment).
The general consensus
It is very important to dispute any incorrect information on your credit report because it may have significant ramifications on your ability to secure credit in the future. In some instances, it’s also one of the fastest ways to make an impact on your overall score. Remember to keep a watchful eye and check your credit score regularly.