If your credit isn't in the best shape, it's worth it to make sure there are no errors on your credit reports. Disputing errors on your credit reports can improve your credit score, which helps you when it comes to financing the big-ticket items you need, like your next car.
Disputing Errors on Your Credit Reports
Disputing errors you find on your credit reports can help you improve your credit score once they're removed. Before you can do this though, you need to know if there are any errors.
Let's take a look at the three steps involved in disputing errors on your credit reports:
- Get your credit reports – You can't dispute errors if you don't know they're there, so the first step is to find out what's on your credit reports. You can do this for free by visiting www.annualcreditreport.com, where you're entitled to a free copy of your reports from each of the three major credit reporting agencies (CRAs), TransUnion, Equifax, and Experian, once every week through April of 2021 (once every 12 months after that).
- Dispute errors in writing – If you check your credit reports and find that there are mistakes, or accounts that you don't recognize, you need to write a letter of dispute proving it to both the reporting credit bureau(s) and the collection agency or company that provided your information to that bureau(s). You can also file a dispute online with most CRAs.
- Wait for results – Once you've filed a dispute, the credit bureau has 30 days to look into it from the day they receive the dispute. If they find that something is wrong, they'll remove it from your credit report(s). According to the Fair Credit Reporting Act, if you've waited more than 30 days for a response, and have not heard any word back after filing your dispute, the credit bureau(s) has to remove the negative mark from your report(s).
You have to follow these steps for each error you want to report, at each credit bureau. Information can vary from report to report, so it's important to check all three of them thoroughly. If you want to keep up with your credit year round after April of 2021, you can go through this process every four months with a different credit bureau.
However, if you notice some big mistakes, or have never looked into cleaning up your credit reports before, now is a great time to do everything in one fell swoop to get the ball rolling. Then, once you've had the bulk of the mistakes disputed, you can move on to doing a regular sweep throughout the year.
Why Dispute Credit Report Errors?
Cleaning errors off your credit reports can make your score go up because it removes items that are old, paid, or just plain wrong. All of those negative marks have the potential to lower your credit score while they're there. Removing them can improve your score.
Unfortunately, there's no way to know how much your score can improve once you've disputed any errors. What we do know is that the more severe the error, the more your credit score can be impacted in a positive way.
For instance, if you find there's a repossession listed on your credit reports, but your vehicle has never been repossessed, removing this could make a big impact on your credit score. On the other hand, if you find there's a paid off account that's still lingering on your credit report years after it's paid off, removing this may only change your credit score by a few points. A few points, however, could be all it takes to get you a better chance at the credit you need.
Other Ways to File a Credit Dispute
If you found errors on your credit reports, but just don't see yourself having the time to sit down to fill out countless dispute forms or write detailed letters, you can sign up for a service to clean up your credit reports for you, like our trusted partner.
These companies go to bat with the credit bureaus and collection companies for you. Typically, the services come with a subscription fee, but it could be worth it if there's a lot of cleanup to be done. It really comes down to how you want to handle these errors – with your time, or your money.
Get a Car Loan to Build Your Credit
Once you've got your credit reports in ship-shape order, the bump in your score could be just what you need to give you the confidence to take on a big-ticket item like an auto loan. Even if the improvement to your credit score from disputing errors didn't land you in good credit score range, you could still be eligible for a subprime car loan.
These loans are designed for people who have less than perfect credit. The lenders that offer them know there's more to you than just a number, so they use other factors in addition to your credit score for auto loan approval. However, these lenders aren’t found everywhere – they work exclusively through special finance dealerships.
If you're not sure how to tell the difference between a traditional dealer and a car lot with a special finance department, turn to us for help.
At Auto Credit Express, we work with a nationwide network of special finance dealerships that are teamed up with the lending resources you're looking for. The process is simple, free of charge, and there's never any obligation to buy. So, why wait any longer to get the vehicle you need? Start here by filling out our auto loan request form today.