Disputing an Error on Your Credit Report – The Five Steps You Need to Take NOW

Inaccurate information on your credit file can cause all sorts of issues when you try to borrow money. Thankfully, there are steps you can take to clear a disputed item.

Every Australian has a credit history. Lenders use this history, alongside other personal information, to determine if you’re a suitable borrower.

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Of course, that means credit report errors can cause major issues. In some cases, they’ll prevent you from getting a loan entirely.

The good news is that the Privacy Act 1988 gives you the right to dispute any errors you may find.

According to the Consumer Action Law Centre:

“…You have the right to obtain a correction on your credit report for any inaccurate, out-of-date, incomplete, irrelevant or misleading information. You can do this free of charge.”

Unfortunately, many Australians don’t even realise this is an option. They just take their credit score as given, despite the fact that errors can lower it.

This article examines the steps you need to take to dispute an error. But first, let’s look at some of the reasons these errors occur in the first place.

What Causes Credit Report Errors?

Usually, the creditor or credit reporting companies make these errors.

The reporting agencies may make clerical errors that cause issues. For example, the company may provide a lender with incorrect information about you. Or they may list a debt twice.

Typically, you can contact the credit reporting company directly to fix these errors.

More commonly, the error is caused by a mistake made by a creditor. For example, they may incorrectly list you as being in default of a loan. Alternatively, they may fail to notify you of an outstanding debt, which can lead to missed payments. 

In some cases, you may have negotiated with the creditor to change your payment terms. If the creditor fails to change their records to reflect this, you may get black marks on your report. This is in spite of the fact that you’re meeting the terms of the new agreement.

The point is that these errors often occur due to oversights beyond your control. This creates room for you to lodge a dispute. To do so, follow these steps.

Step #1 – Request a Copy of Your Credit Report

You have the right to access a free copy of your credit report every 12 months. As ASIC puts it:

“You can receive a free copy once a year if you can wait 10 days from the date you request it. If you need a credit report sooner, or if you want more than one copy in a year, you may have to pay.”

There are several organisations that can provide your report, including:

• Experian
• Equifax
• CheckYourCredit.com

You can’t move forward with a dispute if you don’t know exactly what your report says. It’s recommended to request your report every year, from each reporting company, so you can check through for any mistakes.

Step #2 – Contact the Credit Reporting Agency

If you do spot a mistake, your next step is to get in touch with the credit bureau.

For example, let’s say you’ve gotten the report from Equifax and you spot a mistake. The organisation provides you with a facility to request a correction via its website. 

It will ask you for several details, including:

• The date of the disputed listing 
• The amount of money you’re disputing 
• Any account or reference numbers relevant to the dispute 

In this case, Equifax will conduct an investigation into the dispute. You should receive notification of the outcome within 30 days, though delays are possible.

If they find the dispute has merit, they’ll clear it from your report and notify you by letter. If they decide it doesn’t, they’ll send a letter explaining why and what further action you can take.

Step #3 – File an External Dispute With AFCA

If the credit reporting agency can’t help, you may need to go directly to the creditor to get the listing cleared.

Unfortunately, many creditors are slow to respond to such complaints. As such, you may need to rely on an external organisation, such as the Australian Financial Complaints Authority (AFCA).

According to ASIC:

“AFCA can order the creditor to ask the credit reporting agency to remove the listing. You will not be charged any fees for this assistance.”

Take this step if you don’t hear from the creditor within 30 days of filing your dispute with them.

Step #4 – File a Complaint with OAIC

The Office of the Australian Information Commissioner (OAIC) is your next port of call if the AFCA can’t help.

You can contact the OAIC with any dispute you have. However, you can only do this within 12 months from the date you first learned about the issue. This is another reason why it’s so important to request your free copy of your credit report each year.

Step #5 – Get Legal Help

Even after taking all of these steps, you may find that the credit reporting agency refuses to remove the listing.

In that case, the courts may be your best option. Hire a lawyer who specialises in legal disputes and explain the situation to them. They’ll advise you on any courses of action you can take.

Clear the Errors

In a perfect world, your credit reporting company will clear any errors you make them aware of.

Unfortunately, that doesn’t always happen. You may have to raise your disputes through other organisations. And in extreme cases, you may have to take the dispute through the courts.

The key is to act quickly once you discover an error. There’s a 12-month time limit for contacting the OAIC with a dispute. If you dawdle, you may lose the chance to correct the mistake.

If You’re in Debt

Being in debt places you into a precarious financial situation which can quickly snowball into a catastrophe.

One of the clients at DGI Debt Management was a business owner and the primary provider for his family, when the pandemic hit and dramatically reduced his income. In order to continue paying his bills and putting food on the table, he began to take on more debt than he could afford and quickly found himself with $20,642 in debt.

The Debt Management team was able to reduce his debt down to just $3,759, cutting 82% of his total debt off and giving him the breathing room he needed to get back on his feet.

On top of that, he no longer had to worry about the possibility of bankruptcy, or having to deal with creditors anymore.

To find out if the Debt Management team can improve your debt situation, visit DGI Debt Management today.