Reasons to Dispute Credit

The three major credit bureaus (Transunion, Experian, and Equifax) maintain consumer credit reports containing information on a person's outstanding accounts, her bill payment history, employment, certain court judgments and a variety of demographic information. Sometimes these reports can contain erroneous information. This can happen for a variety of reasons, from identity theft to a simple clerical error. Whatever the cause of the problem, an issue on your credit report can still have a negative impact on your credit rating. Fortunately you can file a dispute to get the information removed. Disputes are typically filed for a variety of reasons.

Identity Theft

When you are the victim of identity theft, the thief will often open as many credit cards and other accounts as possible in your name. Your credit rating will be hurt when he doesn't pay the bills because the delinquencies will show up on your credit reports. If your identity is ever stolen, you should monitor all three credit reports and dispute incorrect items immediately. Be prepared to send police reports and other documentation to back up the dispute. You should also place a fraud alert on your reports, and you may wish to temporarily freeze your credit to make sure the thief cannot open any more fraudulent accounts.

Divorce

Your divorce decree may spell out the bills for which you and your former spouse each take responsibility, but that doesn't always keep your ex-spouse's accounts from staying on your credit report. If his credit cards and other accounts are showing up on your credit report, you can file a dispute and use your divorce decree as documentation. This will prevent his late or unpaid accounts from bringing down your credit rating.

Errors

Credit bureaus are not infallible. They often make errors, reporting accounts on your credit report that do not belong to you or including erroneous information. Some of that information, such as late payments or judgments, can bring down your credit score if it is not removed. Under the law, you are entitled to get a free copy of your credit report from each of the three major bureaus so you can review it for these errors. Review it annually and file a dispute on any incorrect items. The bureaus must remove them if they cannot be verified.

Outdated Information

Even if you have negative information on your credit report that really belongs to you, it can only be reported for a certain length of time. This varies based on the type of information and your state of residence, but items like bankruptcies and foreclosures typically must be removed after seven to ten years. If you have these types of items on your credit reports and the reporting period has ended, dispute the items and demand that they be taken off your records. This can give your credit score a significant boost.

Uncertainty

Sometimes you may just feel that information is not quite accurate or that the company reporting it will not be able to back it up or will not bother to respond to the dispute. If they do not respond to the credit bureau's inquiry or offer any proof, the item will be permanently removed. If you are reasonably certain this will happen, you can file a dispute on the information.