When you’ve ordered your free credit reports, you may be shocked to see there may be many errors such as wrong personal information, accounts belonging to another person with the same or similar name to you, and even incorrect accounts resulting from identity theft.

It’s alarming to know that according to a study conducted by the Federal Trade Commission, one in five people have an error on at least one of their credit reports.

Errors on your credit reports can lower your credit score, which could hurt your ability to get new lines of credit or make the terms of credit more expensive. Ultimately, these errors could be costing you money so they must be removed.

Misinformation on your credit report is not a mistake to take lightly. If you find a mistake on your credit report, the best thing to do is file a dispute. But before we discuss how to file a proper dispute, I’m going to share a few what NOT to do first.

Credit Dispute Mistakes Not to Make

The first credit dispute mistake is to attempt to contact the credit bureaus via the phone or online contact form. This is a fruitless effort and a complete waste of your valuable time.

It addition to being a waste of time, contacting the bureaus via the credit bureaus online dispute system will cause you to give up many rights. And you want all your rights on your side.

The one and only way you should ever contact the credit bureaus is by mail. This is not only the fastest way because it’s how they prefer to communicate, but it also leaves a legal paper trail.

The second is when you file your dispute letter that you do not use canned letter templates that you either found online or you purchased from a credit repair course.

What many of these template creators don’t tell you (and we do), is that these letters are meant to be a guide to follow and not a cut and paste copy.

That’s because your dispute letters will pass through a scanning system before they ever get read by a person. I’ll explain more in detail in a bit, but the basic ideal is to not get flagged as duplicate content.

You must add in your unique story and information to make it your own. And writing it in pen on a piece of paper the old fashioned way won’t hurt either.

Related: Why Your Credit Score Really Matters

So What is a Credit Dispute?

A credit dispute is an official letter to a credit bureau that questions the validity of a transaction registered under your name.

Once received, the credit bureau processes the letter using OCR and E-Oscar systems. Here is how the use of those two systems impacts your credit dispute.

What Happens to My Dispute Letter When It’s Received?

You probably expect that humans read all credit dispute letters. Unfortunately, you are wrong — the initial screening process for credit dispute letters performed by an OCR (Optical Character Recognition) program.

OCR systems work by thoroughly scanning each letter to pull out information and keywords the credit bureaus have identified as important.

After a complete scan, letters get marked as either legitimate or frivolous. Frivolous disputes get discarded, and legitimate disputes move on to the next step of the process – an E-Oscar system.

Related: Can I Raise My Credit Score Overnight?

The Steps to Dispute Errors on Your Credit Report

Step One: Writing Your Dispute Letter

After receiving and reviewing your credit reports from all their bureaus it’s time to write your dispute letter. Again, using the template below as a guide and even handwriting it is an advantage over the thousands of typed letters received daily.

Template:

Date
Your Name and Address
Name and Address of original bank/creditor (address shown on your credit report)
Re: Acct # 000-000-000-000

To Whom It May Concern:

This letter is regarding account # 000-000-000-000, which you claim (insert a derogatory condition here, such as “I owe $200.00′′ or “my account was charged off $800”). This is a formal notice that your claim is disputed.

I am requesting validation, made pursuant to the Fair Debt Collection Practices Act. Please note that I am requesting “validation”; that is competent evidence bearing my signature, showing that I have (or ever had) some contractual obligation to pay you.

Please also be aware that any negative mark found on my credit reports (including Experian, Transunion and Equifax) from your company or any company that you represent, for a debt that I don’t owe, is a violation of the Fair Debt Collection Practices Act; therefore if you cannot validate the debt, you must request that all credit reporting agencies delete the entry.

Pending the outcome of my investigation of any evidence that you submit, you are instructed to take no action that could be detrimental to any of my credit reports.

I appreciate your time and attention to this matter.

Be advised that the description of the procedure used to determine the accuracy and completeness of the information is hereby requested as well, to be provided within 15 days of the completion of your reinvestigation. Under federal law, you have 30 days to complete your investigation.

Sincerely,

Full Name

Social Security Number

You’ll notice the usage of the Fair Debt Collection Practices Act in the letter. This helps the bureaus know you aren’t ignorant to the laws that they must abide by.

You should receive a written response within 30 days of the receipt of this letter.

Step Two: Mailing Your Dispute Letter

Once you’ve taken such great care in crafting up your dispute letters, you never want to just drop them in the mail.

You need a tracking system to be sure they will be handling your file within the 30 day request. Sending your letter certified mail with a return receipt requested is vitally important.

Step Three: Wait and Resend as Needed

If you do not hear back within the 30 days you’ll need to send another round of letters. It’s helpful to note that most individuals and even credit repair agencies don’t get all disputes removed in the first round.

Here’s a template of the 2nd letter:

Date
Your Name and Address
Name and Address of original bank/creditor (address shown on your credit report)
Re: Acct # 000-000-000-000

To Whom It May Concern:

This letter is a follow up to my original letter dated (date) regarding an inaccuracy on my credit reports, regarding account # 000-000-000-000, which you claim (insert a derogatory condition here, such as “I owe $200.00′′ or “my account was charged off $800”).

By not replying in a timely manner to my initial letter on (date), you have not only violated federal law, but you have also failed to provide me with a copy of any viable evidence, bearing my signature, showing the account is being reported accurately.

Be aware that I am making a final goodwill attempt to have you clear up this matter. The listed item is entirely inaccurate and incomplete, and represents a very serious error in your reporting. I am maintaining a careful record of my communications with you for the purpose of filing a complaint with the FTC and the Attorney General’s office, should you continue in your non-compliance of federal laws under the Fair Debt Collection Practices Act.

I further remind you that you may be liable for your
willful non-compliance, as per FDCPA § 807. False or misleading representations [15 USC 1962e] As you have now violated federal law, by not properly investigating within the required timeframe, and I have evidence of such, via certified mail receipts, you must now remove the item. Any other action (or in-action) on your behalf will result in a small claims action against your company.

I appreciate your time and attention to this matter.

Sincerely,

Full Name

Social Security Number

If you’ve sent this following letter certified mail and waited the full 30 days for a response and action has not been taken, you can send a third letter. This is to get them moving on your file if they haven’t already.

Here’s an example letter:

Date

Your Name and Address

Name and Address of original bank/creditor (address shown on your credit report)

Re: Acct # 000-000-000-000

Dear Sir or Madam/To Whom It May Concern,

Please be advised that if the items are not deleted I will be filing a complaint with the CFPB (Consumer Financial Protection Bureau).

On [Enter Date] I requested that inaccurate/erroneous items that were illegally being reported to my credit file with your agency be deleted. You refused to do so and claimed to have verified these items.

On [Enter Date of 2nd letter] I requested, as required by FCRA 611 (a) (7), that you provide me with a complete copy of the information that you used to investigate the matter. You failed to provide me with that information and again failed to delete the items.

Federal Law requires you to respond within 15 days. It has been over [Enter number of days since 2nd letter]. Failure to comply with Federal Regulations by Credit Reporting Agencies will be investigated by the FTC (see 15 USC 41, et seq.) and/or the CFPB.

These negative items have caused financial and emotional stress. Your blatant disregard of the law forces me to fully exercise my rights and file a formal complaint with the Consumer Financial Protection Bureau. Please be advised that I will file this complaint if these inaccurate items are not removed immediately.

I have fully documented all attempts to remove these inaccurate items and have also documented your failure to comply with Federal Laws.

Sincerely,

Full Name

Social Security Number

Final Thoughts

Going through the process of repairing your credit yourself is lengthy and oftentimes stressful, especially if you take things personally.

The credit bureaus unfortunately don’t make this process easy and the deck is really stacked against us, but this process is possible. It is possible to repair your credit and have excellent credit down the road.

It vital to stay the course but also know that it’s perfectly fine to outsource this process to a reputable credit repair agency like my agency at ARG Financial Services who love taking on this stress for our clients and WINNING!

It’s also extremely important to note that building and maintaining a positive credit rating is a life long process. Monitoring and protecting your credit should be a high priority that will provide many valuable benefits in your lifetime.

And never give up on your dream of having excellent credit. It is possible for everyone willing to work for it.