Credit card errors can significantly reduce your credit score and make it much more difficult to qualify for low-interest credit cards, loans, and other forms of credit. While correcting these errors may not land you a perfect credit score, it can lead to substantially lower interest rates and an easier time obtaining financing.
Most people assume that credit card errors are extremely rare, but they could happen to anyone. In fact, the Federal Trade Commission found that 26 percent of study participants had found at least one mistake on their credit report.
Luckily, credit card errors are usually correctable. However, it’s critical to identify them quickly and take the right steps to address the problem. Left unchecked, it’s easy for mistakes to remain on your statement and affect your balance, potentially leading to higher payments or a lower credit score.
How do credit card errors happen?
Mistakes on Credit Card Reports
Creditors sometimes make mistakes, but many credit report errors happen when the creditor enters incomplete or inaccurate information. Even small changes like omitted middle initials or different forms of the same name can cause your report to include someone else’s information.
Another common issue is that your credit file may not reflect information from all credit accounts. Some creditors don’t give data to credit bureaus unless you ask, and this isn’t required. You should either contact your creditor or switch to a provider that automatically provides a report.
These are some of the most common issues to look for when verifying your credit report:
- Clerical errors, especially if you submitted handwritten documents
- Multiple reports of the same account
- Debts from your former spouse after a divorce
- Closed accounts still reported as open
- Bad debts more than seven years old
The next time you order a credit report, take a close look for some of these common errors. Getting them fixed is an easy way to improve your credit score.
Updating Your Credit Report
If you notice any of these problems on your report, you can get it fixed quickly by contacting all relevant parties. Start by reaching out to the credit bureau along with whomever provided incorrect information—both sides are legally required to fix any inaccuracies.
You can contact two of the three credit bureaus by phone, but all three allow you to go through this process online. You’ll need to describe the issue and add copies of all relevant documents. They’re responsible for investigating your issue within 30 days of your request.
Make sure to ask the creditor responsible for the issue to send you a copy of anything they send to the credit bureaus. It could take as long as 90 days to hear back, so don’t expect an immediate response. Most states allow you to request another free report after your dispute ends to make sure it’s accurate.
Additional Options
Most credit report errors are fixed quickly, but the credit bureau may not agree with your dispute in all cases. In this case, your credit report will not be changed and the error in question will continue to affect your score. Fortunately, you still have some options if the credit bureau disagrees with your assessment of the situation.
First, you should consider asking the credit bureau to add your statement to all future reports. Anyone who requests your credit report will also see a summary of your dispute. Furthermore, the credit bureau will send this information to anyone who recently received a copy of your credit report.
If you dispute information provided by a creditor, you should also ask them to include a record of the dispute when they send the data to credit bureaus. While this isn’t as effective as getting the information changed, it still lets potential creditors know your side of the story.
Finally, you can hire a lawyer to advocate on your behalf if you truly believe in your dispute. This is an expensive option, but it may be worth it if the error has a substantial impact on your credit score. Higher interest rates can lead to much higher payments over the term of a loan or credit card.
Credit Card Billing Errors
In addition to errors on your credit report, you might also be affected by mistakes on your credit card statement. Again, these are easy to miss but could be costing you a significant amount of money, so it’s important to develop the habit of reviewing all statements. Double swipes and other technical issues are the most common causes of billing errors.
Correcting the Mistake
While you could use a credit repair company to correct mistakes on your credit report, many errors can be fixed quite simply on your own.
The first step toward fixing these errors is talking to the merchant and trying to resolve the issue without escalating to a dispute. If that doesn’t work, you’ll need to start gathering documentation in order to prove the error to your credit card company. Remember to make copies rather than using the originals.
It’s important to let your credit card company know about the problem within 60 days. Send them a letter including relevant documents and request a delivery receipt so that you have proof of its arrival. Some credit card providers also give you the option to file disputes online.
From there, you’re legally entitled to a response within 30 days. Your provider is responsible for making a decision within two billing cycles or 90 days. While you’re not required to pay the disputed charge until a decision is made, you’ll be liable for interest if the company doesn’t remove the charge. You can file a challenge as long as ten days after receiving the decision.
One-fourth of the U.S. population is affected by a credit report error. Regularly checking your credit report is the only way to make sure your information is completely accurate. If you notice something wrong, follow the steps we’ve outlined above to get the problem fixed as quickly as possible.