80% of credit reports contain errors or inaccuracies on them and that is not a very pleasing statistic. But since the 3 major credit bureaus (Equifax, Experian and TransUnion) are not always accurate in they're reporting and the creditors that report these items are not always careful, what can be done?
First, we should realize what types of errors or inaccuracies show up on credit reports. I have literally seen thousands of credit reports and there are numerous examples but we will stick to the main ones.
1. Outdated Accounts-credit reports should not have accounts that are older than 7 years old from date of delinquency. However, you should not trust that this will automatically happen as there is only a 50% chance that the account will be removed after the 7 years. I have personally seen accounts still showing up nearly 20 years later!
2. Fraudulent Accounts-More and more people are becoming victims of fraud or identity theft. It is the fastest growing crime in the US bar none. The reason being is that it is quite easy for someone to steal your identity. You will likely never know you are a victim until you see the account on your credit report and / or you start receiving phone calls, letters and claims for the money when the accounts are not being paid. To this day, I have yet to come across an identity thief that was nice enough to pay the bill for the victim they were perpetrating.
3. Inaccurate Details-this is probably the most common example. Account balances, limits, payment amounts, payment dates, addresses, creditors (this happens as loans are bought and sold regularly.) Even the spelling of your name and your birth date. All of these details can show up inaccurately and can affect your credit scores.
4. Human Error. Here's a typical synopsis of how easy it can happen: you mail your bill in-on time, the check and pay stub takes longer to get to the creditor (because of our lovely postal system) or ends up stacked in a pile on someone's desk . Presto, your account has not been paid on the due date-due to human error. This immediately gets reported to the credit bureaus and now you have a 30 day late payment showing on your report. How could this happen you ask? Again, I will emphasize human error and until that goes away (which will be the day after never) then there will always be inaccuracies.
Here's the easy part. Now that you know what the errors are on your credit report, you can dispute it. All you need to do is write a simple letter disputing the error in question and include any supporting documentation citing your case. The credit bureaus then have 30 days to research the information to verify the validity. As long as your dispute is warranted and is really not your fault, then the item in question will be deleted or changed. There are no additional steps necessary to "repair" your negative credit.
Here's the great news. If for some reason, the accounts still show up after the bureaus have done their research-there is one more course of action that can be taken that will have the creditors and / or credit bureaus begging you to leave them alone.