When Should You Dispute An Account On Credit?

If you’re working towards healthy credit, you’ve probably heard about “disputing” or “investigating” accounts on your credit report. Unfortunately, many people or companies market this process as a magic tool that can make things disappear from credit. This is not the case, and you should avoid frivolously disputing accounts on your credit report.

However, you have the right per the Fair Credit Reporting Act to investigate, dispute, or request validation on any accounts that may be inaccurate, unverifiable, misleading, or outdated. If you have accounts that are in violation of the Fair Credit Reporting Act, then they are required to be removed from credit entirely, absolving you of the debt obligation. This is a major benefit to consumers looking to build healthy credit because it promotes accurate reporting practices and protects you from paying on accounts that you shouldn’t.

We do need to add some clarification on the removal of accounts. If you frivolously dispute accounts with the intent to manipulate a creditor or the account information, the creditor does have the ability to correct or reassign that account to your credit report. This is why it’s important to understand when you should dispute an account. We’ve put together a few questions to ask yourself before you start the dispute process.

Question #1: Do I know when or where this collection came from that’s on my credit report?

If the answer is no, you may want to investigate this account. Per the Fair Debt Collection Practices Act, it’s required for creditors or collection agencies to follow a set process to ensure you get a chance to resolve outstanding debt obligations before they hit your credit report.

Question #2: Has this account already been paid?

It may seem ridiculous, but thousands of consumers pay on collections or debts that are not theirs, or more specifically, that have already been paid. This is prevalent in the medical industry. If you have a collection resulting from a medical emergency, it’s worth the time to investigate the account. There’s a good chance it was resolved by your insurance or lumped into a separate bill that’s already been satisfied.

Question #3: Is this something that I intend on paying?

If you have a collection on your credit report that you are considering paying, there are a few things you need to identify before you pay. First, how old is the collection? If it is older than three years, I’d recommend investigating the account before payment only to make sure it’s not reporting with any FCRA violations. Second, is the account reporting accurately on your credit report? If the account is missing dates, has misspellings, or the balances are incorrect, you should dispute the accuracy of that account. There’s nothing more frustrating than paying a collection just to find out your being hit with additional fees or not paying the correct creditor.

Ultimately, it’s very important that you stay vigilant in your efforts to uphold a fair and accurate credit profile. If you see potential FCRA violations, dispute the accounts. Just remember, disputing isn’t a magic wand and abusing the process won’t fix your credit challenges.