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How to Address Inaccuracies on Your Credit Report

credit report

Businesses worldwide partly rely on credits to secure the funds they need to operate. A good credit report has a positive impact on your business. Financial institutions are more likely to provide affordable funds to borrowers with accurate and positive credit reports.

However, inaccuracy or error in your credit report can damage your debt history and deteriorate your reputation. Whether you’re planning to borrow money or pay back your funds, your credit report needs to be accurate. This article emphasizes common credit report errors and how to address these inaccuracies.

Common Credit Report Errors

If you find any inaccuracies in your credit report, it’s important to highlight them and address them instantly. Here are some common credit report errors for both businesses and personal credit card holders:

  • A clerical error in reading or entering your name or address from a handwritten application
  • Loan or credit card payments are applied to the incorrect account
  • Accounts are reported more than once, giving the impression that you have more open lines of credit or owe more money than you do in reality.

How to Avoid Credit Report Errors?

There are some easy ways to avoid credit report errors and inaccuracies. Let’s discuss some of them briefly.

Choose a Business Credit Card

The best way to avoid a credit report error is to choose the best credit card for your business in the first place. Business credit cards offer powerful account management tools and allow you to track your business spending and acquire credit reports on demand.

Business credit cards have numerous benefits over personal credit cards. If you are a frequent traveller, a business credit card sets you free from foreign transaction fees and adds travel rewards to get discounts for your next flight. You also get cashback and reward points for other things like dining out, using business cards for bulk purchases, etc. Business credit cards also facilitate purchase protection, like extended warranties and insurance. If you aim for a premium business credit card, you become eligible for airfare credits and an elite hotel and airline status.

Regularly Check Credit Reports

Instead of tracing your credit report errors among thousands of account entries, reviewing your credit report more frequently is better. This way, you can deal with the error as soon as it occurs. While you get an annual credit report from major credit bureaus, various websites and creditor services allow you to view your credit report weekly.

Addressing Inaccuracies on Your Credit Report

The credit bureau and the company that supplied the information to the credit bureau must correct your report. Under the Fair Credit Reporting Act, both parties are responsible for correcting inaccurate or incomplete information in your report. Inform both parties that you wish to dispute the information in your report.

Examine Your Credit Report Comprehensively

  • Examine all sections of your credit reports thoroughly.
  • Ensure your personal and business information is correct and up to date.
  • Check your credit reports carefully to ensure no errors, such as missed payments, outstanding debt, or credit age.

Record All the Errors

If your credit reports contain inaccuracies, note which credit bureau(s) listed them. You will need to dispute any errors you find with each credit bureau.

It’s possible to find an error on one credit report and not on others, even though credit bureaus generally use the same information to calculate credit scores. You should ensure that all the information you see on your credit report is accurate and up-to-date since credit bureaus do not necessarily collect the same information as other bureaus.

Contact the Business Involved

If you discover an inaccuracy, you must notify the entity that provided the credit bureau with the incorrect reporting through a letter or an email. Your letter must include paperwork or proof of the error to support your claim.  Include copies of any associated payment records, contracts, or other documents, notifying them of the inaccuracy of your report.

If the provider submits the same information to a bureau again, you must notify them of your disagreement. Ensure the provider copies you on any correspondence they submit to the bureau. This procedure usually takes between one to three months.

Send Error Dispute to Credit Bureau

Experian Disputes, TransUnion Disputes, and Equifax Disputes handle all error disputes on personal credit reports. In contrast, Experian Small Business Disputes, Equifax Small Business Disputes, and Dun & Bradstreet Disputes deal with disputes on business credit reports. You can contact the appropriate company accordingly.

If you’re mailing a letter, send it through certified mail services, and request a return receipt. This way, you can prove that the credit bureau received your message. Keep copies of your disagreement letter and any attachments.

Keep Monitoring Your Credit Reports for Updates on Disputes

Once the dispute on your credit report is submitted, you should expect it to be removed from your credit report. However, you may need to follow up again to ensure that your mistake issue is correctly handled.

If inaccuracies still exist, you can choose to lodge an error dispute afresh. Examining your credit reports regularly will keep you updated with your dispute status.

Do Accepted Disputes Affect Your Credit Score?

When errors in your credit record are corrected, your credit rating usually improves. There are rare cases, however, in which your credit score can remain unchanged despite being updated or fixed.

The first reason is that many people think cancelling credit cards will correct their credit score – this, however, is a myth. You cannot erase inaccuracies from your credit report by closing an account, nor can you prevent payment history from being reported.

Removing unwanted information from your credit report may not improve your score either. You need to closely examine exactly which information affects your score apart from the inaccuracies.

Final Thoughts

Good Business credit reports have a highly positive impact on your credit record and credit score. For this reason, we highly recommend that you attempt to resolve any inaccuracy in your credit report at the earliest. This comprehensive guide will help you a long way in addressing inaccuracies in your credit report.

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