Insider secrets that will raise your credit score

The credit reports of more than one out of every five Americans include errors, according to a new study by the Federal Trade Commission. In millions of cases, such errors can lower credit scores and make it more difficult, or even impossible, to obtain a mortgage and other loans at attractive rates…qualify for appealing credit card deals…or even land a job or rent an apartment.

The errors, which lead to about eight million disputes filed by consumers each year, are frustratingly difficult to correct. That’s because the three major credit-reporting agencies automatically take the word of creditors or collection agencies over the word of consumers, a fact that some critics consider to be a violation of the agencies’ obligations under federal law.

The usual advice when you find a mistake in a credit report is to file a dispute with the credit-reporting agency—Equifax, Experian or TransUnion. But consumers who do this often have their complaints rejected, even when they have strong evidence on their side.

Here is a four-step plan that gives you better odds of getting an error on your credit report corrected*…

Step 1. Call the creditor that reported the erroneous information to the credit-reporting agency. The customer service phone number might be listed in the credit report. If it’s not, it probably can be found by doing a Web search.

Explain that you wish to dispute something that the company has reported, and ask to speak with the appropriate person. When you are transferred to that person, briefly and calmly explain why you disagree with the credit report listing. (If you have evidence that supports your position—for example, bank or credit card statements that show you paid the bill in question—gather these before placing the call.)

Examples of what to say: “The credit report listing says that I was late with a payment, but my bank account statement shows I always paid on time.” “It’s true that I was behind on the loan, but I’m now current on it and my credit report should be updated to reflect this.”

Take notes during the call, including the name of the person you speak with and anything he/she says that seems to support your position.

Businesses that supply information to credit-reporting agencies are required by federal law to investigate consumer complaints such as these. If they discover mistakes, they are required to report them to all three credit-reporting agencies within 30 days.

Alternative: If the company that furnished the erroneous information is a collection agency, call this agency and demand that it contact the original creditor to “verify the debt.” If the collection agency later tells you that the creditor has confirmed that the debt is correct, then that creditor—not the collection agency—likely is responsible for the mistake. If so, contact that creditor as described above. Ask the collection agency to verify the debt again after the creditor has agreed that it made an error to make sure that it has been corrected.

Why dispute an error on your credit report with the creditor rather than the credit-reporting agency? Because the agencies are just middlemen that parrot information provided to them by creditors. If you take your dispute to one of the agencies—as most people do when they discover errors—the agency will simply contact the creditor and ask whether the disputed information is accurate. If you haven’t already explained to this creditor why the information is wrong and/or given the creditor proof, there’s a good chance that it will simply confirm the erroneous information and the reporting agency will reject your dispute.

Any evidence or well-reasoned arguments that you present to the reporting agency likely will do you no good. The agencies are supposed to pass the details of consumers’ disputes along to creditors, but a study by the Consumer Financial Protection Bureau found that they just reduce the information to a one- or two-digit numeric code and possibly—in just one in four cases—a bare-bones written summary of the dispute, which gives the creditor little to go on.

Exception: If the error stems from a mistake in the public record—for example, a nonexistent bankruptcy filing or missing release of a lien—that mistake isn’t being supplied by a creditor. It is being collected directly by the credit-reporting agency. In these situations, you should dispute the information directly with the credit-reporting agency—skip ahead to step 4 for details. If the problem involves documents that are missing from the public record, attach copies of these documents when you mail your complaint to the reporting agency.

Step 2: Follow up your phone call with a certified letter, return receipt requested, to the creditor. This letter should reiterate that you are disputing a specific piece of information and briefly explain why it is incorrect. (Ask the person you speak with on the phone for the proper mailing address.) Keep this letter short and simple—it will be skimmed quickly by a low-level employee or a computer program. Attach photocopies of any evidence you have to defend your position.

Step 3: Call the creditor again—and again and again if necessary until you reach someone willing to help—if your initial complaint is rejected. Do your best to stay calm and patient when you call. Getting angry reduces the odds that someone will want to help you. Ask for a manager if you’re forced to make repeated calls because he may have more authority to help you.

Step 4: Send the credit-reporting agency (or agencies) a certified letter, return receipt requested, disputing the erroneous information, too. This letter should be short and simple, like the one you sent to the creditor. Wait until after the creditor has responded to your complaint before mailing this letter. Exception: Send letters to both the creditor and credit-reporting agency as soon as possible if you’re in a big rush to fix your credit score.

Why send a letter to the reporting agency when you already have raised the matter with the creditor? First, if the creditor agrees with your complaint and changes its records, this letter ensures that the agency will learn of the change. Creditors are supposed to inform the agencies when they discover mistakes, but that doesn’t always happen. And second, only by informing the agency of your complaint do you obtain the right to later sue it under the Fair Credit Reporting Act if the error is not corrected (see below).

Warning: The agencies offer the option of disputing credit report information online, but sending a letter allows you to supply details and/or evidence. True, the reporting agencies probably won’t pay much attention to the details and evidence, as discussed above. But if you eventually must sue, the fact that the agency ignored your evidence and well-reasoned arguments could strengthen your case.

Keep copies of all your correspondence and enclosures and detailed notes of your phone conversations—including names of the people you speak with.


If incorrect information remains in your credit report despite your repeated attempts to get it removed, you could sue the credit-reporting agency and/or creditor in state, federal or small-claims court.

If you want to sue in state or federal court, click the “Find an Attorney” link on the Web site of the National Association of Consumer Advocates ( to find lawyers who have the right qualifications and experience.

If you have a strong case, you should be able to find an attorney willing to take it on contingency—that is, in exchange for 30% to 40% of the amount you win rather than an hourly or flat rate. If so, the matter may be settled quickly—creditors and credit-reporting agencies take your argument more seriously when confronted by lawyers.

Don’t expect to receive much of a settlement—typically $2,500 to $5,000, less your lawyer’s cut—but at least the error will be removed from your credit report. Sometimes cases that don’t end in settlement result in much bigger awards after a trial verdict.

Do not pursue the matter with a lawyer if you can’t find one willing to take your case on contingency. That could be a sign that your case isn’t strong enough to settle quickly. The legal fees from an extended battle likely would be prohibitively steep.

*You can obtain a free copy of your credit report from each of the three credit-reporting agencies once every 12 months through