Disputing Credit Report Errors

Glamis Haro is the last person you'd expect to be hounded by a collection agency.

As the lending manager at Union Settlement, a federal credit union in Harlem, N.Y., she'd spent years advising clients on how to avoid the exact situation she suddenly found herself in. But it wasn't negligence that landed Haro in hot water with lenders -- it was an error on her credit report.

Because of a transactional mistake by her bank, it appeared that she had made a late payment on her mortgage. The erroneous report was then sent to the credit bureaus, which caused her impeccable credit score of 810 to plummet nearly 50 points overnight. Then came the embarrassing collection letters.

"I went ballistic," Haro said. Her bank had credited the payment to the wrong account, and in the process, put a dent in her credit score that would take months to repair.

Haro's not alone. According to the U.S. Public Interest Research Group, one in four reports can have an error serious enough to hurt one's chances of getting new credit. The findings are especially troubling for homeowners in today's market, whose credit history is under constant scrutiny by lenders. To safeguard against a costly slip up in your future, it's important to know how to dispute a claim on your credit report -- and more importantly, how to follow up with your creditors.