In credit repair, the credit dispute process involves the use of two systems called Metro 2 and e-OSCAR. If you are unfamiliar with these terms, as is likely the case for most consumers, then keep reading this article. Credit expert John Ulzheimer takes us behind the scenes of the consumer dispute process and explains the importance of the Metro 2 and e-OSCAR systems in consumer credit disputes.
The Right to Dispute Information on Your Credit Reports
The Fair Credit Reporting Act (FCRA) is a federal statute that confers rights to consumers with regard to their personal credit reports.
Where Does the Information on Your Credit Reports Come From?
The information on your credit reports is provided by data furnishers, such as your lenders, to the three major credit reporting agencies (CRAs): Equifax, Experian, and TransUnion.
According to the Consumer Financial Protection Bureau (CFPB), there are approximately 16,000 of these data furnishers in the United States.
Here are some examples of data furnishers that may report information about your credit accounts to the credit bureaus every month:
Banks Credit unions Financial service providers Mortgage lenders Auto lenders Student loan servicers Debt collector
Disputing Information With the Credit Reporting Agencies (Indirect Dispute)
One way to dispute something on your credit report is to file a dispute with the CRAs. This method is called an indirect dispute because rather than taking your dispute directly to the furnisher itself, you are asking the credit bureau to investigate the claim on your behalf.
The credit bureau is then obligated to conduct a “reasonable investigation” into your dispute, which typically includes contacting the furnishing party and asking them if there is any validity to your credit dispute.
To understand how indirect disputes work, we first need to define Metro 2 and e-OSCAR. Then, we can take a look at each step in the procedure and see how Metro 2 and e-OSCAR play important roles in the dispute process.
What Is Metro 2?
Metro 2 is the “language” used by data furnishers to communicate information to the credit bureaus. It is the standard (and only) language used for this purpose. The previous version of this language, Metro 1, is outdated and is no longer used.
The Metro 2 language consists of alpha, numeric, and alphanumeric characters. These characters go into different fields on your credit report which indicate certain things.
Metro 2 is communicated through the Consumer Data Industry Associate (CDIA) using a manual called the Credit Reporting Resource Guide (CRRG).
When the data furnishers receive dispute forms from the credit bureaus, the information on those forms is encoded in the Metro 2 language.
What Is e-OSCAR?
e-OSCAR is a communication protocol analogous to a phone line between the credit bureaus and the companies that furnish data to them. It is used to transmit information such as dispute forms back and forth between the credit bureaus and data furnishers.
Like Metro 2, e-OSCAR is universal, meaning it is the only communication method used in the dispute process and therefore it is used by all three credit bureaus.
How the Indirect Dispute Process Works
You challenge information on your credit report by filing a dispute with a credit bureau. The credit bureau assigns a dispute code to your claim, which is meant to indicate the nature of your dispute. The credit bureau sends an automated consumer dispute verification form (ACDV) to the data furnisher using e-OSCAR. The furnishing party logs into the e-OSCAR system to view the disputes. The data furnisher looks at the dispute code on the ACDV indicating the reason for the dispute. For example, the consumer may have stated that the disputed information does not belong to them. The data furnisher goes into their internal system to review the consumer’s account in order to verify or refute the disputed information. The furnishing party then reports the results to the credit bureau by indicating this on the ACDV and sending the ACDV back to the credit bureau via e-OSCAR. The credit bureau updates your account in their records to reflect the correct information and sends a copy of the report to the consumer.
You can read more about the forms used in the credit dispute process in another article.
Filing a Dispute is Free for Consumers
As a consumer, you do not have to pay to dispute information on your credit report or to have that information corrupted. The right to be able to dispute items for free is mandated by the FCRA.
This includes the updated credit report that the credit bureau sends to you once their investigation is complete.
Summary of Metro 2, e-OSCAR, and the Credit Repair Dispute Process
The FCRA gives you the right to dispute information on your credit report for free. Data furnishers, e.g. lenders, report information about your accounts to the credit bureaus every month. You can dispute something on your credit report by going to the CRAs, which is called an indirect dispute. The CRAs and data furnishers communicate dispute information using forms and codes via the e-OSCAR platform and the Metro 2 language. Once a credit bureau finishes their investigation into your dispute, they confirm or update the information on your credit report and send you a copy.
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Derogatory entries on your credit report, such as 30-day late payments, 60-day late payments, collections, and more, can seriously damage your credit score. Is there a way to get derogatory items removed from your credit report so that your score can bounce back? Let’s find out.
What Are Derogatory Entries on Your Credit Reports?
The term derogatory simply means negative, so derogatory items on your credit report are any items that reflect negatively on your credit. In other words, they indicate that you have failed to make timely payments on your debt.
Derogatory entries can be divided into two categories: minor derogatories and major derogatories. They both can hurt your credit substantially and contribute to bad credit, but major derogatory items have a greater negative impact on your credit score than minor derogatory items.
Examples of Derogatory Items on Your Credit Reports Minor Derogatory Entries
30-day late payments 60-day late payments
Major Derogatory Entries
90, 120, 150-day late payments, etc. Charge-offs Collections Foreclosures Settlements Short sales Repossessions Public records (bankruptcies)
A bankruptcy on your credit report counts as a major derogatory entry.
The Good News: You Can Dispute Inaccurate Derogatory Information on Your Credit Reports
As a consumer, you have the right to have your credit reports be accurate, as dictated by the Fair Credit Reporting Act (FCRA).
Therefore, if there is information on your credit reports that is wrong, then you have the right to ask for the incorrect information to be either corrected or removed from your credit reports.
In order to challenge inaccurate information on your credit reports, you can file a direct dispute with the party that furnishes your data to the credit bureaus (e.g. a lender, financial services company, debt collector, etc.) or an indirect dispute with the credit reporting agencies (CRAs).
If you choose to go the route of an indirect dispute, you contact the CRAs about the problematic information and they then investigate the dispute with the company that is furnishing the data.
You can use either type of dispute to ask for the inaccurate derogatory information on your credit report to be corrected or deleted altogether.
The Bad News: You Do Not Have the Right to Have Accurate Negative Information Removed From Your Credit Reports
According to the FCRA, accurate and verifiable negative information can remain on your credit reports for up to seven years.
Unfortunately, that means if the derogatory information on your credit reports is accurate and verifiable, then the CRAs are under no obligation to remove it before the 7-year clock runs out.
Derogatory information that is accurate and verifiable can stay on your credit report for up to seven years.
How to Dispute Derogatory Entries on Your Credit Reports
It is free to dispute inaccurate information on your credit reports, and you can do this process yourself. Another option is to hire a reputable credit repair company to do this work on your behalf.
If you choose to complete the dispute process yourself, you can do this in a few different ways:
Go to the CRAs’ websites and file your dispute online
Mail your dispute through the postal services Contact the CRAs over the phone Dispute the information directly with the furnishing party
You can submit your disputes online on the CRAs’ websites.
Which Dispute Method is Most Effective?
While there is not necessarily a “best” way to file a dispute, often, plaintiff’s lawyers advise consumers to file their disputes with the credit bureaus because this method may leave you in a better positioned to take legal action if the credit bureaus fail to remove the incorrect information.
The Benefits of Disputing Directly With the Furnishing Party
When you file a direct dispute with the company that is furnishing the inaccurate information to the credit bureaus, you are addressing the information at its source. For this reason, the data furnisher has an obligation to correct the error with all of the CRAs they report to.
If a mistake is showing up on more than one of your credit reports, the direct dispute strategy can save you some time since you are only filing one dispute to have the information corrected on each of your credit reports where it is applicable.
Working With a Credit Repair Company to Remove Derogatory Information
Although the consumer credit dispute process is free to use, some consumers may choose to work with a credit repair company to accomplish their goals.
In this case, the credit repair company goes through the dispute process on your behalf.
While a credit repair organization cannot charge you in advance of providing a service as per the Credit Repair Organizations Act (CROA), if they successfully get the information corrected or removed, they can then charge you for this service that has been fully performed.
How Do You Know if You Need to Dispute Incorrect Information on Your Credit Reports?
To find out if there are errors on your credit reports, you need to get copies of your own reports.
Typically, you can do this for free once every 12 months with each of the three credit bureaus. However, due to the COVID-19 pandemic, the CRAs have made it easier to check your credit more often by making it free to check your credit reports every week until April 20, 2022.
To order your free credit reports, go to annualcreditreport.com, which is the only website that is federally authorized to provide your free credit reports, and request them there.
How Long Does the Dispute Resolution Process Take?
The credit bureaus are technically allowed to take 30 days to complete their dispute investigation process, but this rule is decades old. These days, with the technology we have now, it is more likely that your dispute will be resolved in only 10-14 days.
Consumer disputes are usually resolved within two weeks.
We hope this article has been informative for those wondering about how to get derogatory information removed from your credit reports! To learn more about how to use credit report disputes effectively, check out our article on How to Fix the Most Common Credit Report Errors.
Want to see the video version of this article, featuring credit expert John Ulzheimer? Watch it below and then subscribe to our channel on YouTube to see more helpful videos about the credit system!
When you file a credit dispute, there are certain forms and processes that are used in order to resolve the dispute.
To help familiarize you with the credit dispute process, let’s go over:
What these forms are used for When these forms are used The information that is included on these forms
The specific forms that are required depend on which type of dispute you are filing.
Indirect Disputes
The credit bureaus get your credit data from the individual lenders or companies you have accounts with, also known as data furnishers. Some examples of these businesses include financial services companies, banks, credit unions, credit card issuers, and debt collectors.
When you file a credit dispute with the credit reporting agencies rather than contacting the business that is furnishing the disputed data, this is called an indirect dispute, since you are not going directly to the company that is providing the incorrect information.
Automated Consumer Dispute Verification Form (ACDV) or Consumer Dispute Verification Form (CDV)
Indirect disputes involve a form called the Automated Consumer Dispute Verification form (ACDV) or the Consumer Dispute Verification form (CDV). The ACDV is simply the modern digital version of the CDV, which refers to the analog format of the original document on paper.
When you initiate a dispute with a credit bureau, the credit bureau generates an ACDV that contains the information about your dispute.
The credit bureau then sends the completed ACDV form to the data furnisher using a communication system called e-OSCAR.
At this point, the lender furnishing the disputed data investigates the claim, updates the ACDV, and sends the form back to the credit bureau.
Finally, the credit bureau reviews the form, makes the appropriate changes to the consumer’s credit report, and notifies the consumer of the results of the dispute.
Direct Disputes
If you choose to dispute the inaccurate information on your credit report with the furnishing party, that is called a direct dispute, because you are going directly to the lender without involving the credit bureaus.
Automated Universal Dataform (AUD) or Universal Dataform (UDF)
When you make a direct dispute with the furnishing party, the data furnisher should correct the error and fill out an Automated Universal Dataform (AUD) reflecting the correction. The AUD is the automated digital version of the form, which was originally called the Universal Dataform (UDF).
Once the AUD has been prepared, the furnishing party sends it using e-OSCAR to all of the credit bureaus where the error is appearing on your credit report. The data furnisher is obligated to contact each credit bureau to ensure that the error has been removed from all three of your credit reports.
Did you know that a large proportion of consumers have errors on their credit reports? Unfortunately, it’s true. In 2017, the most common complaint received by the Consumer Financial Protection Bureau (CFPB) had to do with incorrect information being reported on consumers’ credit reports.
A study conducted by the FTC in 2012 found that about 25% of consumers had at least one error on one of their credit reports. Some of those consumers were paying higher interest rates on loans as a result of those errors bringing down their credit scores.
From this information, you can see that it’s all too likely that you may have an error in your credit report. Let’s go over some of the most common types of credit report errors and how to fix errors on your credit report.
How to Get Your Credit Report
The first thing you will need to do in order to identify errors on your credit report is, of course, obtain a copy of your credit report.
You can get your credit report for free from annualcreditreport.com, which is the only website authorized by the government to provide your annual free credit report.
Under the Fair Credit Reporting Act (FCRA), you are legally entitled to receive one free credit report from each of the three major credit bureaus once every 12 months. You can choose to order all three credit reports at the same time or order each individual report at different times throughout the year.
Watch out for other websites claiming to offer free credit reports or free trials, especially if they ask you for payment information.
However, there are some reputable websites where you can view a simplified version of your credit report for free, such as CreditKarma, CreditSesame, WalletHub, and Bankrate. They are able to offer this service by advertising credit products to users.
Inspect your credit report regularly to catch errors early.
You can also request a free credit report if you are denied credit because of information found in your credit report. The credit report must be from the credit bureau that provided the original report to the lender.
In addition, you can qualify for an additional free report if you are unemployed and planning to apply for jobs, if you receive government assistance, or if you are a victim of identity theft.
Credit experts recommend checking your credit reports at least once a year, so make sure to take advantage of any opportunities to get a free copy of your credit report.
You can also pay to get your credit reports directly from the credit bureaus.
Types of Credit Report Errors Identity Errors
Your personal information is not accurate. For example, your name is misspelled or your address is incorrect. This is an indication that the credit bureau may be confusing you with another person. This can sometimes happen with family members who have similar names or live at the same address. Your file has been mixed with someone else’s. If you see accounts on your credit report that belong to someone else who has a similar name or the same address, this could mean that your credit report has been merged with another person’s report due to having similar personal information. There are accounts that you didn’t open. Accounts that you know you didn’t open but are listed in your name indicate that someone has stolen your identity and used it to fraudulently open accounts.
If there are accounts in your name that you didn’t open, your identity may have been stolen.
Account Information Errors
Accounts are reported more than once (duplicate accounts). Sometimes, the same account may be shown twice on your credit report. This can definitely hurt your credit if it’s a derogatory account that’s been duplicated. An account reports that you are the primary owner of the account when you are actually an authorized user (or vice versa). It’s possible that the credit bureaus have mixed up who is the primary owner of the account. Closed accounts are reporting as open (or vice versa). Sometimes, accounts that you have closed in the past will still be reporting as open. This can be problematic especially if it’s a negative account, such as a collection. On the other hand, if an open account is reporting as closed, that’s also a problem because it can hurt your utilization ratio. There are late payments on your report, but you were on time. Late payments are highly damaging to your credit score, so if you’ve never been late paying your bills but your credit report indicates otherwise, that’s an error you’ll want to correct as soon as possible. An account has an inaccurate open date or date of first delinquency (DOFD). If an account has an incorrect open date, this could change the age of the account, which could, in turn, impact your credit score. An incorrect DOFD on a derogatory account, such as a collection account, will affect when the negative mark falls off your credit report. Accounts show incorrect balance or credit limit information. Some credit cards do not report a credit limit at all, which could hurt your credit utilization ratio. Alternatively, your credit report may not be showing the correct balance or credit limit, which could also potentially hurt your utilization.
Clerical Errors
Inaccurate data was added back into your credit report after being corrected. If you’ve corrected an error on your credit report but then see the same error pop back up again, it could be a clerical error on the part of the credit bureaus or the data furnisher. Duplicate collection accounts with different debt collectors are all being reported as open accounts. As we explained in our article on collections, this situation is called “double jeopardy” on your credit report. If an account has been sold to a debt collector, there may legitimately be multiple accounts for the same collection on your credit report, but the original account should be updated to show that it has been transferred and should no longer show a balance owed. The collection agency that currently owns the debt should be the only entity reporting the collection as open with a balance owed. There is negative information on your credit report that is more than seven years old. Negative information must be removed from your credit report seven years after the date of first delinquency, so if any derogatory information on your credit report is older than seven years, you can have it deleted.
How to Fix Errors on Your Credit Report
To get the best results, write a letter for each dispute and send your letters by certified mail.
If there are any errors on your credit report, you can contact the credit bureau that is reporting the inaccurate information to resolve the issue. Your credit report should contain information on how to file a dispute.
1. Gather All Necessary Information and Supporting Evidence
When you submit your dispute, it’s important to provide all the information the credit bureau will need to process your claim.
This may include the following:
An annotated copy of your credit report (circle or highlight the incorrect item) Documentation to verify your identity (copies, not original documents) A letter containing additional information about the item, an explanation of why it is incorrect, and a request to update or remove the incorrect item Copies of supporting documents that provide proof of the item’s inaccuracy
2. Submit Your Credit Dispute Letter Via Certified Mail
Although it is possible to dispute credit report errors online, many credit experts recommend instead writing a letter and sending it in the mail along with documentation to verify your identity and supporting evidence.
If you try to dispute an error online or over the phone, you may not have the chance to provide enough supporting evidence, and the credit bureau may dismiss your dispute as frivolous.
It’s also recommended that you send your letters by certified mail so that you have proof that the letters have been received. In addition, it’s a good idea to keep copies of your correspondence in case you need to get outside help.
3. Send a Separate Dispute Letter for Each Error
If there is more than one error on your credit report to deal with, it is best to send a separate letter for each dispute, since the credit bureaus may reject long lists of disputes as frivolous.
4. Consider Working With a Reputable Credit Repair Company
Annotate each error in your credit report and provide documentation supporting your dispute.
If you have a lot of errors to dispute or if you have been the victim of identity fraud, you may consider hiring a credit repair service to assist with the process. [Disclosure: This article contains affiliate links.]
5. Contact the Furnisher of the Incorrect Data
You should also contact the lender that furnishes the data to the credit bureaus to ensure the inaccuracy gets corrected at the source. The FTC also provides a sample dispute letter to send to data furnishers.
If you neglect this step, the error could show up on your credit report again the next time the lender reports to the credit bureaus.
6. If Your Identity Was Compromised, Consider Placing a Credit Freeze or Fraud Alert on Your Profile
If the error on your credit report was the result of identity theft, it might also be a good idea to contact the credit bureaus to place a fraud alert or credit freeze on your account.
A fraud alert requires lenders to take extra steps to verify your identity if someone is trying to open an account in your name, whereas a credit freeze blocks anyone from viewing your credit file except for businesses that you have existing relationships with.
Keep in mind that if you are planning to buy tradelines, you must have all fraud alerts and credit freezes removed first, or the tradelines will not post.
What Happens Next?
Once the credit bureau has received your dispute, they have 30 days to investigate your claim. If their investigation cannot verify the information on your credit report, they must update it with accurate information or delete the item.
In addition, the credit reporting agency is required to provide you with written documentation of the results of the investigation.
You are also entitled to get a free copy of your credit report from the company if your credit report has been changed as a result of the dispute. This free copy is not counted as one of your annual free credit reports from annualcreditreport.com.
Upon your request, the credit bureau must notify any entity who pulled your report in the past six months about the corrections made to your report. If anyone has pulled your report for employment purposes in the past two years, you can ask to have an updated copy of your report forwarded to them as well.
What To Do If You Disagree With the Dispute Results Option 1: Add a Consumer Statement to Your Credit File
If your dispute is rejected and you don’t agree with the credit bureau’s decision, you have the option of adding a consumer statement to your credit report to explain the situation. However, this is not necessarily the best solution.
Firstly, the statement doesn’t get factored into your credit score, so it won’t help your chances when a lender uses an automated system to approve or reject applicants. If it’s a case where an underwriter is looking at your credit report, adding a consumer statement may just draw their attention to a negative item unnecessarily, especially if the item is older.
Option 2: File Another Dispute With Additional Information
Another option is to submit a second dispute with additional supporting documentation to try to get the credit bureau to investigate the dispute a second time.
Option 3: Submit a Complaint to the CFPB
If the credit bureau still fails to correct the information in your credit report, you can submit a complaint to the CFPB.
The CFPB may not be able to force the credit bureaus, as private companies, to do anything, but getting a government agency involved might encourage the credit bureau to rethink their position.
Option 4: Take Legal Action
Continuing to report inaccurate information after you have disputed it is a violation of the FCRA. If you feel that a credit bureau is violating your rights under the FCRA, you have the option of talking to a lawyer about potentially taking legal action.
Conclusions on Credit Report Errors
Unfortunately, errors on credit reports are very common, so we all need to be vigilant about monitoring our credit for fraud and inaccuracies.
Make sure to check your credit reports regularly by claiming your annual free credit reports as well as using a reputable free or paid service throughout the year. As soon as you spot any errors, try to get to the bottom of them and get them corrected both with the credit bureaus and with the data furnishers as soon as possible.
By making sure that your credit report only contains accurate and timely information, you are helping to protect your financial health and ensuring that credit report errors don’t stand in the way of future opportunities.
In the world of consumer credit, there are a number of Federal laws or “statutes” which help consumers in regards to their personal credit. Two such notable statutes are the Fair Credit Reporting Act, more commonly referred to as the “FCRA”, and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, more commonly referred to as the “CARD Act.”
Both of these laws are consumer protection statutes, meaning they were designed to protect consumers from supposed big bad industry players. But do they really help consumers to better manage or even to establish or re-establish credit? If you dig deeper into the fine print of some of the so-called “protections” you might answer, “no.”
The Fair Credit Reporting Act
The FCRA has been around since the early 1970s, is some 90 pages long and has been amended dozens of times. In the world of consumer credit reporting, the FCRA is essentially the Bible. The FCRA is best known for providing the following protections to consumers, complete with its shortcomings;
Right to free credit reports: Since 2003 every U.S. citizen with credit reports has had the right to see those credit reports at no cost once every 12 months. The website where you can claim those Federal freebies is www.annualcreditreport.com. I’ve often made the point that while “once every 12 months” may have made sense in 2003, it doesn’t make sense in 2019. Given the number of large-scale data breaches and expanding consumer awareness of credit reporting it seems like once every 12 months has become insufficient.
You have the right to dispute inaccurate information on your credit report.
Right to dispute: If you believe something on your credit reports is incorrect, you have the right to dispute that information, for free. When you dispute the information the credit reporting agencies and the companies that furnished the information must perform a reasonable investigation. Many years ago I was critical of this process, but my stance has evolved.
The dispute process has become much more consumer-friendly and is normally completed within a couple of weeks rather than the allowed-for 30 days. Consumers can now add supporting documents/attachments to their dispute communications and the credit reporting agencies can and do override responses from their data furnishers, disproving the assertion that the credit bureaus simply “parrot” what’s reported to them.
There are many other protections afforded to consumers by the FCRA, but some argue it falls short of helping consumers to establish or rebuild their credit. The reason is that the entire credit reporting system is voluntary.
Voluntary System
The FCRA does not require any lender or service provider to report information to the credit bureaus. That’s why you generally don’t see things like rent or utilities on consumer credit reports. And, even in the lending environment, there’s no requirement that any lender must report your account or accounts to any or all of the credit bureaus. And while I’m not criticizing the Act’s silence on this issue, unknowing consumers may think they’re building credit by paying rent and utilities when they really aren’t.
Even in the world of authorized user tradelines, a common and effective method of building or rebuilding credit reports and credit scores, there are some card issuers that do not report to the credit reporting agencies. There’s no obligation in the FCRA for issuers to do so. As such, it’s important that if you’re being added as an authorized user to someone’s credit card that you do so with an issuer that does, in fact, report to the credit reporting agencies.
The Card Act
Let’s get something on the record…I really don’t like the CARD Act. The Card Act is the statute that makes it illegal for credit card issuers to grant credit to a consumer who is under 21 unless they have a job or a co-signer. The same consumer can get themselves into five or six figures of student loan debt, but they can’t open a credit card.
Additionally, many large credit card issuers don’t allow co-signers any longer. As such, the “co-signer” exclusion to the under-21 restriction of the CARD Act isn’t even an exclusion any longer, unless you want to limit your credit card options. Further, the under-21 rule also seems to suggest when someone turns 21 their financial or employment situation will immediately change, which isn’t a guarantee and certainly not tied to an age.
Those who are under 21 can still begin to build credit using the authorized user strategy.
The under-21 restriction also puts everyone who doesn’t have a job or a co-signer three years behind the curve as to building their credit reports. Before the CARD Act, someone as young as 18 could have opened credit accounts in their name, no problem. This eventually served them well as they would start building credit at an earlier age.
Authorized Users Are Still A Good Option
The one way around all of this statute silliness is the authorized user strategy. There is no restriction to being added as an authorized user to a credit card, regardless of your age. As such, people who are under 21 can still begin to build credit, improve their credit scores, and enjoy the benefits of using plastic.
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group and the author of four books about consumer credit. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has 27+ years of experience in the consumer credit industry, has served as a credit expert witness in more than 370 lawsuits, and has been qualified to testify in both Federal and State courts on the topic of consumer credit. John serves as a guest lecturer at The University of Georgia and Emory University’s School of Law.
Disclaimer: The views and opinions expressed in this article are those of the author John Ulzheimer and do not necessarily reflect the official policy or position of Tradeline Supply Company, LLC.
Nearly half of Americans believe a credit score and a credit report are the same thing, according to a study by the American Bankers Association. That’s a big problem because it means many of us are seriously misinformed about how the credit system works.
Since credit is such an integral part of our financial ecosystem, it affects nearly all of us at some point in our lives. Your credit health can determine not only your access to credit and the cost of using credit but also employment opportunities, housing options, and more. Not understanding how credit works, therefore, can have serious consequences.
We want to help address this problem by making it easy to understand what your credit report is and why it’s important, the difference between your credit report and credit score, how to get a free credit report, and how to dispute errors on your credit report.
What Is a Credit Report and Why Is It Important?
A credit report is a detailed report on your credit history prepared by a credit reporting agency, also known as a credit bureau. The three main credit bureaus are Experian, Equifax, and TransUnion, and we’ll discuss each below. What is in your credit report can be different for each bureau, since they are private companies that do not share information.
What Is in a Credit Report?
Credit reports contain identifying information such as your name, social security number, and current and previous addresses. They also contain a detailed summary of your credit history, which includes items such as the following:
Credit reports include a list of your credit accounts and financial records.
A list of current and past tradelines (credit accounts), along with the date opened, credit limit, balance, and payment history of each account Inquiries into your credit history Public records of bankruptcies, foreclosures, tax liens, etc. Accounts in collections
How Far Back Do Credit Reports Go?
The information in your credit report usually goes back about 7-10 years. Current accounts should show up on your credit report as long as they are open. Negative information, such as collections, will fall off your credit report seven years after the delinquency occurred. Closed accounts that were closed in good standing fall of your credit report in 10-11 years.
What Is the Difference Between a Credit Report and a Credit Score?
A list of all your credit accounts and related personal information A three-digit number between 300 and 850 meant to represent your creditworthiness
Information in your credit report is used to calculate your credit score Reflects the information in your credit report
You are legally entitled to get a free credit report from each bureau once a year You are not legally entitled to check your credit score for free (although some credit card companies may offer this to customers)
Does not include your credit score Does not include information on your credit history
Does Checking My Credit Report Hurt My Score?
While this is a common misconception, you can rest assured that checking your credit report won’t lower your credit score. Checking your own credit is what’s known as a “soft inquiry” or “soft pull,” which doesn’t hurt your credit. “Hard” inquiries can ding your score, but these are used by creditors when making lending decisions, not for checking your own credit report.
How to Get a Free Credit Report
By law, everyone is entitled to receive one free credit report from each of the three major credit bureaus once every 12 months. You can order all three at the same time or order each individual report one at a time.
Some people like to spread them out and get a free credit report from a different bureau every four months so that they can regularly check their credit reports for errors and inconsistencies. Each credit bureau is a private, for-profit company, and they don’t share information, so you could have errors on one of your credit reports but not the others.
Free credit monitoring websites like CreditKarma provide free credit reports and scores.
The best way to check your credit report for free is to order your free credit report from annualcreditreport.com. In fact, this is the only website authorized to provide the annual free credit report you are legally entitled to, according to the FTC—so beware of other sites claiming to offer free credit reports or free trials, especially if they ask for your credit card information.
However, there are now several free credit report websites that earn money through advertising and are thereby able to offer free credit monitoring services. Sites that offer completely free credit reports include:
You can also check your credit report for free if you have been denied credit because of the information in your credit report. You are entitled to get a free credit report from the bureau who provided the report that the lender used to make their decision.
You are entitled to a free credit report if you are unemployed and applying for jobs.
For example, if the lender who denied you credit looked at your Experian credit report, you can request your Experian free credit report. The adverse action letter informing you of the reason for your denial should have instructions on how to request your free credit report.
There are a few more cases in which you can qualify for an additional free credit report, including:
If you are unemployed and planning to look for work. If you receive government assistance. If you are a victim of identity theft.
Although experts recommend checking your credit reports at least once a year, the Consumer Financial Protection Bureau (CFPB) estimates that less than one in five consumers get copies of their credit reports each year. Don’t miss out on this opportunity to get your credit report for free so you can make sure your credit report is accurate and identify any problems before they get worse.
Can I Get a Free Credit Report Directly From the Credit Bureaus?
You can also get your credit report directly from each of the credit bureaus, but you may have to pay a fee if you go this route. If you want to get a credit report for free, your best bet is to order from annualcreditreport.com.
However, some people may want to check their credit reports more than once a year, so we’ll discuss additional options for obtaining your credit reports below.
Experian Credit Report
You can get a free Experian credit report that refreshes every 30 days through Experian’s website. They also offer paid options that come with additional information. The Experian free credit report does not include a free credit score.
Equifax Credit Report
You can get your TransUnion and Equifax free credit reports on third-party websites.
While you cannot get an Equifax free credit report from the bureau directly, you can pay a fee to access your Equifax credit report and score. To get your Equifax credit report, visit their website.
You can also view your free Equifax credit report and score through CreditKarma, which updates once a week.
TransUnion Credit Report
Accessing your TransUnion credit report requires signing up for a paid monthly subscription service with TransUnion. However, you can get a free TransUnion credit report from CreditKarma or NerdWallet.
How to Dispute Errors on Your Credit Report
Unfortunately, studies have shown that as many as one in five consumers may have errors on their credit reports, and about one in 20 have errors that are significant enough to potentially lower their credit scores. This means it is crucial to monitor your credit reports regularly and be aware of how to fix errors on your credit report.
The credit bureaus offer online forms to submit credit report disputes, but experts warn against using this option, as it does not allow you to write a detailed explanation of why you are disputing the information or provide sufficient supporting evidence. This leaves room for the credit reporting agency to deny your claim because you did not provide enough information.
The best way to dispute a credit report is to write a detailed credit report dispute letter and mail it to the bureau along with plenty of documentation verifying your identity and supporting your claim.
Once a dispute has been filed, the bureaus typically have 30 days to investigate the claim. If they verify that the item is accurate, it will remain on your report; if not, they must either update the item with the correct information or delete it entirely.
Errors on your credit report can, unfortunately, lead to bad credit. For this reason, checking your credit report regularly and disputing any errors is an essential step in maintaining your financial health.
It’s important to check your credit report for errors regularly.
If you have a lot of errors on your credit report or if you have been the victim of identity theft, it may also be worth considering hiring a reputable credit repair service to assist you in the dispute process.
Which Errors Can You Dispute?
The law requires that the information in your credit reports must be accurate, complete, timely, and verifiable. Anything that does not meet these requirements can be disputed.
Technically, you can dispute anything in your credit file, but that doesn’t mean you should try to dispute things that you know are accurate. The credit bureaus are allowed to ignore “frivolous” claims, and if they verify something to be true, it will stay on your credit report.
For more tips on how to dispute a credit report, check out this article from creditcards.com.
Quick Credit Report Facts
A credit report is a detailed report on your credit history prepared by one of the credit bureaus: Experian, Equifax, and TransUnion. The information in your credit report is used to calculate your credit score. Checking your credit report does not hurt your score. You are entitled to a free credit report from each of the three bureaus once a year, which you can order from annualcreditreport.com. You can dispute errors on your credit report by mailing a credit report dispute letter and supporting documentation to the credit bureau.
In credit repair, the credit dispute process involves the use of two systems called Metro 2 and e-OSCAR. If you are unfamiliar with these terms, as is likely the case for most consumers, then keep reading this article. Credit expert John Ulzheimer takes us behind the scenes of the consumer dispute process and explains the importance of the Metro 2 and e-OSCAR systems in consumer credit disputes.
Derogatory entries on your credit report
Did you know that a large proportion of consumers have errors on their credit reports? Unfortunately, it’s true. In 2017, the 
In the world of consumer credit, there are a number of Federal laws or “statutes” which help consumers in regards to their personal credit. Two such notable statutes are the Fair Credit Reporting Act, more commonly referred to as the “FCRA”, and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, more commonly referred to as the “CARD Act.”
