As a consumer, the information on your credit report is critical to ensuring you can not only obtain loans or open accounts, but also helps to ensure that you receive fair rates based on your information. That is why discovering the inclusion of a debt that has been paid as unpaid can take a serious toll on your credit score. If this reflects your circumstances, understanding why this happens, the impact it can have on your finances, and the steps you can take to dispute the inclusion of this information is critical. The following blog explores what you should know about these matters, including the importance of working with a San Diego County credit reporting lawyer is in your best interest during these complex legal matters.
Why Is a Paid Debt Showing as Unpaid on My Consumer Credit Report?
When you check your credit report, seeing a debt that you have paid appear as unpaid can be troublesome. After confirming your payment in your records, you may be unsure what your rights are or how to proceed.
In some instances, an inaccurate payment on your credit report may be the result of a “credit lag.” It can often take between thirty and sixty days for the information on your credit report to update, as credit furnishers and reporting agencies may experience delays or errors.
In other instances, failure to update the credit report can be the result of administrative or computer errors. Similarly, if a credit furnisher or collection agency fails to inform the reporting agency of the payment, it may not appear on your report. Regardless, this can take a serious toll on your credit, so understanding how to proceed is critical.
Will This Impact My Credit Score?
Unfortunately, the inclusion of an error like listing a paid debt as unpaid can be incredibly impactful on your credit score. Your payment history makes up one of the largest parts of your FICO credit score at 35%, and negative information can result in a serious reduction of your credit score. After 30 days without payment, the creditor can list the debt as unpaid, which can drop your credit score by up to 100 points.
Unfortunately, a drop in your credit score this drastic can have serious consequences, such as the denial of credit lines or applications. In the event you are approved, you may incur astronomical interest rates as a result of the negative event on your credit history.
Can I Dispute This on My Credit Report?
In the event that a debt is incorrectly listed as unpaid on your credit report, it’s important to understand your legal options. As a consumer, you have the right to accurate information on your credit report under the Fair Credit Reporting Act (FCRA). This means you are able to dispute the inclusion of incorrect information.
To file a dispute, you’ll need to file a dispute with each of the credit reporting agencies. To do so, you should request a copy of your credit report and highlight the incorrect information. You should then attach evidence that the information is incorrect, such as proof of payment. You may choose to file a dispute through the agency’s online dispute portal or by sending a letter to the agency. If you choose to send the letter, you should send it via certified mail to ensure that you receive confirmation that the agency has received the dispute.
Unfortunately, navigating the dispute process can be incredibly difficult, especially when an agency ignores or denies your claim. That is why working with an experienced attorney with Barthel Legal is in your best interest. Our firm understands how difficult these matters can be, which is why we will do everything in our power to fight to ensure the information on your credit report is accurate. When you need help, our dedicated legal team is here. Contact us today to learn how we can represent you.
