There are few things more alarming than finding an error on your credit reports. An error on your credit report can bring your credit rating down, and bad credit can have a major effect on your financial health. Credit report errors can impact your ability to get loans, credit cards and even a mortgage. They can also make it harder to rent an apartment or find a job.
Luckily, fixing a credit report error is possible and shouldn’t take too much time. Once you get the ball rolling with the credit bureau, it can take anywhere from a week to 30 days on average to dispute a credit report. The important thing is to fix any problems fast so your score and credit worthiness don’t take a dive. Here’s what you need to know about the time it takes to dispute credit reports. What is the Dispute Resolution Process?
By law, Canada’s two credit bureaus, TransUnion and Equifax, must verify the accuracy of a credit report if you dispute any information. Here’s a brief overview of the proper steps to follow to file a credit report dispute.
Check your credit reports
Potential lenders determine your creditworthiness based on your credit reports and credit scores, so it’s vital to check them regularly and take time to go over them carefully. Pay special attention to things like personal identifying information (like your name, birthdate and address), account dates, details about each individual loan or credit card account and more.
It may surprise some Canadians to learn that each of the country’s two credit bureaus may have different financial information on file (because it depends what credit bureau your various creditors report to). TransUnion and Equifax even rely on slightly different algorithms to calculate credit scores, so it’s smart to check your scores and files with both bureaus. You can download your Equifax credit report for free by signing up for Borrowell.
Provide supporting documentation
A credit bureau will need proper supporting documentation to look into your dispute. The documentation you need will depend on the kind of information you dispute. In general, you may need the following documents:
Personal information: You could provide a document like a driver's licence, birth certificate, or a utility bill that shows your official current address if you are disputing personal info on your credit report, such as your name, date of birth, or address
Account information: You’ll need to provide account information like up-to-date bank statements, letters from creditors and/or proof of identity theft to dispute errors you see on one of your credit accounts
Other information: Other information you might need includes proof of a bankruptcy discharge or other court documents, release letters from loan providers or collection agencies, or debt consolidation agreements to dispute incorrect
File a Dispute with Equifax
Each credit bureau has their own dispute process you’ll need to follow. With Equifax you can lodge a dispute online via their website or by mail. It’s free to file a dispute using either method. You only need to provide copies of documents so make sure not to send in the originals if you file your dispute by mail. Expect to wait anywhere from 5 to 20 business days to find out the result of an investigation.
File a Dispute with TransUnion
With TransUnion, you can file a dispute online via their website, by mail, or even by phone by speaking with a representative. There is no fee to lodge a dispute. TransUnion states that it can take up to 30 days to investigate credit report errors. What Are The Most Common Credit Report Errors?
Remember to take the time to review your credit scores and reports with both credit bureaus as each one may have different information on file. Here’s an overview of the most common errors that can show up on your credit reports and negatively affect your credit worthiness.
How Long Can Negative Information Stay On Your Credit Report?
Personal information mistakes: Old mailing addresses, the incorrect spelling of your name, or the wrong date of birth
Incorrect payment status: Payments that you made on time may incorrectly show up as late or as missed completely
Closed credit card or loan accounts may be reported as open
Negative information that remains on your credit report beyond the maximum required years (in general, except in rare cases, nothing should stay on your report for longer than 7 years)
Credit card accounts or loans for a person who has a similar name or for someone who may have fraudulently used your identity to open loan and credit card accounts
Duplicate accounts that were created when a creditor got you mixed up with someone with a similar name
The unfortunate truth is that negative information (even if it’s an error) can remain on credit reports and significantly damage your credit worthiness for a long time. Here’s an overview of how long information stays on your credit report. Note that Equifax and TransUnion may have slightly different rules as to the time something stays on your report.
It may not seem like a big deal to you but even one missed or late payment can be reported to a credit bureau and then remain on your credit report for up to six years from the date the late payment was reported. In fact, a missed or late payment remains on your report even if you pay off your balance or close your account. Late payments hurt your credit by as much as 150 points, according to Borrowell internal data. If you think there’s an incorrect late payment on your credit report, there are specific steps you can take to dispute a late payment.
Collection or charged-off accounts
If you frequently miss payments or are late making your minimum payment your lender could decide to charge-off your account (which means your lender sends your account to a collection agency). When an account is charged-off it’s reported to a credit bureau and will stay on your report for six years from the date you made your last payment. Note that if you make a payment to the collection agency, the charged-off account will still stay on your report but it may have less of a negative impact on your credit score.
If you believe an account is in collections by mistake, there are steps you can take to dispute collections on your credit report.
If you declare bankruptcy it will stay on your credit report for six years from the discharge date (which means the date when you pay off any required outstanding payments) or seven years if you don’t have an official discharge date. If you claim bankruptcy a second time both bankruptcies will stay on your file for 14 years from the discharge dates. Be aware that even if your first bankruptcy was removed from your credit report because the allotted time had passed, when you declare bankruptcy for a second time, your first bankruptcy is actually reinstated on your report.
If you’ve never filed for bankruptcy but notice there’s one listed on your credit report, take the specific steps you need to quickly dispute a bankruptcy.
Registered consumer proposal
A consumer proposal is when you have a formal legal agreement between you and your creditor (these agreements must be set up by a licensed insolvency trustee) to pay off a set percentage of your overall debt. A consumer proposal comes off your credit report three years after you’ve paid off the agreed upon debts.
Even a cheque returned for insufficient funds goes on your credit report and will stay there for six years! You should contact your bank directly if you notice an issue with your bank on your credit report.What Happens Once You File a Credit Report Dispute with Equifax?
One you file a credit report dispute, Equifax will review the information you provide and if it’s a simple fix (like an address change) they can do it right away. If the issue is more complex, they will then contact any relevant creditors to confirm the information you provided in your dispute document. If necessary, they will ask you for any additional documents or details they need.
Once the investigation is completed, Equifax will send you a letter or email informing you of the results of their investigation. Equifax reports that it generally takes anywhere from 5 to 20 business days to process a dispute.What Happens Once You File a Credit Report Dispute with TransUnion?
TransUnion will proceed to carefully verify any credit information that you dispute. They will contact any creditors as needed to verify information. If the relevant details can’t be verified, TransUnion will remove the disputed information from your file. They will then also notify any companies that made recent inquiries to your credit report that your file has been amended. Furthermore, they will send you a notice by mail about the findings of their investigation. TransUnion estimates that it takes approximately 30 days to conduct an investigation. What Should You Do If You Disagree With Your Dispute's Resolution?
If you registered a complaint with Equifax and the dispute was not resolved to your satisfaction you can elect to add a statement to your credit file free of charge that details the nature of your dispute. The statement must be 400 words or less and will be included with your report each time a potential creditor accesses your file.
If TransUnion investigates your complaint and does not rule in your favour, you can choose to add a 100-word statement to your report (200 words if you live in Saskatchewan) to explain the details of your credit report dispute. This consumer statement will be held on file for six years and can be viewed by anyone accessing your report.
If you are not satisfied with the response you got from either Equifax or TransUnion, you can escalate your complaint by contacting your provincial or territorial Consumer Affairs Office. Residents of Quebec would need to lodge a complaint with the Commission d'accès à l'information du Québec (CAIQ).The Bottom Line
Finding an error on your credit report can be shocking and frustrating, but fixing the error can be straightforward once you know the process and understand how long it takes. When you dispute an error with Equifax or TransUnion, you can expect your error to be fixed within a week to a month, on average.
If you believe you have an error on your credit report, start the dispute process as soon as you can. Removing an error from your credit report can have an immediate positive impact on your credit score and overall financial health.