Because your credit report has a significant bearing on your credit score and the credit that lenders will extend to you, it’s important that your credit report doesn’t contain any inaccurate information. If you settle an account and satisfy the debt, the creditor needs to update the notation. If the report still shows that you owe, you do have options.
Checking Your Reports
After you settle your account, the creditor is responsible for updating your credit report to show that you settled the debt. Allow between 30 and 90 days for the settlement notation to show up on your credit report. After this time elapses, it’s prudent to request copies of your credit reports from each of the three credit bureaus so you can make sure they show the account settled without a balance.
Filing a Dispute
When you find inaccurate information on your credit report, file a dispute with that credit bureau to correct the error. Each of the big three credit bureaus has a process in place for submitting a dispute about specific information. File a dispute online with Experian, Equifax or TransUnion by visiting the appropriate credit bureau’s website and following the directions you find there. If you have documents that support your claim, such as an invoice showing a zero balance, copy the document and upload it to the credit bureau's website.
After finding an error or ongoing notation of a paid-off account, contact the creditor to request an update of the information on your credit report. The Fair Credit Reporting Act requires creditors to correct erroneous information that's submitted to a consumer’s credit report. Write a letter that details the error and include copies of any documents that verify your claim. The company has to investigate your claim within 30 days and inform you of the decision. If the company changes a notation about your credit, it also has to give you a free copy of your credit report. You can also request that the company send notice of the correction to anyone who pulled your credit within the last six months.
Results of Investigation
The credit bureau or bureaus that posted the incorrect information will investigate your dispute. It will contact creditors involved in the dispute to learn the status of the settled account. If the credit bureau can verify that you settled the debt according to the terms of the settlement, the bureau will correct the notation on your credit report. If the credit bureau doesn’t find an error, no adjustment will occur. You will receive an email notifying you of the results of the investigation.
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