Dear Consumer Ed:
I paid off my car loan last year, but my credit report is still showing a balance of over $8,000. How can I get this corrected?
Consumer Ed says:
When you pay off a debt, the lender will provide an update to the credit reporting agencies (“CRAs”) to notify them that the account is now paid in full. However, it's still a good idea to ask for written documentation that the debt has been paid off in case you need to provide proof in the future. How quickly the payoff is reported to the CRAs once payment is received depends on the lender's reporting schedule. A good rule of thumb is to allow 30 to 60 days for the information to be updated.
If it's been more than a couple of months with no update, or if having the account updated is a time-sensitive matter, you can dispute the account directly with the CRAs – Experian, Equifax, and TransUnion. The CRAs should then contact the lender on your behalf and ask them to verify and update the information. If you have documentation from the lender showing that the account has been paid off, you can submit a copy of that documentation along with your dispute request. You can also contact the lender directly and ask that they notify the CRAs of your successful payoff.
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