Credit Basics
Repair Your Credit
What do I do now?
Once you have your credit report and understand what is on it and how long information can be reported, you're ready to create a strategy for building better credit.
Step 3: Fix mistakes.
It's not unusual to find wrong or outdated accounts. You may want to check for the following items:
Accounts that don't belong to you. Keep in mind, though, that if you cosigned for an account, it will likely be reported on your credit report and treated as your own. If you were only an authorized user on an account that fell behind, the creditor may be willing to remove it from your credit report since you weren't legally responsible for the bills.
Incorrect balances. While you can expect it to take 30 - 60 days for information about your loan balances to be updated, you shouldn't see completely wrong information. For example, an account that was discharged in bankruptcy or settled through a collection agency should show a zero balance.
Duplicate accounts. If an account was turned over to multiple collection agencies, only the most recent collection agency account should appear. Otherwise, it can look as if you have more accounts in collections than you actually do.
Old accounts. You may find old accounts you don't use anymore still listed. Even if an account is paid off, it may remain for the legal time limit. Fair Isaac Company, creator of the popular FICO credit scores, recommends that you don't close old accounts because doing so may hurt your score and won't help improve it.
To dispute wrong information, you can contact the credit reporting agency that is listing the wrong information, the credit grantor that is reporting it, or both. The advantage of going to the credit reporting agency is that they are better equipped to handle disputes. If they cannot promptly confirm the information on your report with the source, by law it must be removed. The disadvantage is that the major credit bureaus don't share information with each other, so you'll have to check all major credit reports and dispute mistakes through each one that has the wrong information.
The advantage of disputing mistakes directly with the credit grantor is that the lender must supply any correction to all the credit bureaus that have the wrong information. The disadvantage is that creditors aren't always set up to handle disputes and you may find it harder to get your problem resolved promptly.
Whichever approach you choose, put your dispute in writing, type it if your handwriting isn't clear, and make it brief yet describe the problem clearly. If you have any documentation to prove your side of the story, include it. The credit bureau or credit grantor must generally get back to you within 30 days to tell you the results of their investigation. Keep copies of all the letters you send and get back.
Tips for writing an effective dispute letter:
- Include your name, address, phone number, social insurance number, account number (if applicable) at the top of your letter so your file can easily be found
- Type your letter if you have access to a computer
- Keep your letter brief, to the point and professional
- Describe the problem exactly and suggest a solution
- Send your letter certified mail with a confirmation of receipt
- Include documentation if you have it and if it’s applicable. Make copies of originals and send the copies
- Keep a copy of the letter you send
- Keep a copy of any correspondence you receive in response to your request
- Write down the names, dates and times you speak with anyone from the creditor’s office or the credit reporting agency regarding the matter
Below you will find two worksheets to help you track problems and disputes with your credit report. The first worksheet is for you to list any problems or questions you find with your credit report. The second worksheet is to help you track the dispute process if that is the road to you take to resolve the issue or questions you may have.
Credit Bureau Problem/Question Worksheet
| Creditor Name | Account Type | Problem/Question | Contacted? | Resolved? |
Credit Bureau Dispute Worksheet
| Creditor Name | Disputed With | Contact Name | Contact Date | Resolved? |
Sample dispute letter
Carla Consumer
123 Main Street
Anyprovince, Canada A1B 2C3
Social Insurance Number
Date
I am writing to dispute two items on my credit bureau pulled on DATE:
- Account # - 12345 – Bank name – This account is not mine. I do not have any accounts with this lender
- Account # 6789 – Bank name - this account incorrectly shows a balance. I paid it off on DATE. Please update my file to show a zero balance
Thank you in advance for your efforts to resolve this matter.
Sincerely,
Carla Consumer
