Credit report errors are more common than you think. Many people just assume their credit is right because it’s handled by a software system, but there are many errors that can appear on your report. Knowing what to spot can help you determine if your credit is accurate.
Believe it or not, one mistake on your credit report could be the reason you don’t secure the loan approval you need. It is worth the time it takes to determine if your credit is accurate.
Sometimes the wrong name, address, or even account is reported on your credit report. For example, you might have an account on your credit that doesn’t belong to you but belongs to someone with a similar name. You could also have accounts that were opened in your name but were a result of someone stealing your identity.
As you go over your credit report, look at the identity carefully. Review your name, address, and phone number. If any of these items are wrong, chances are some of your accounts might be wrong as well. As you go through each account, make sure that they belong to you. If they don’t, you must get in contact with the credit bureaus right away.
Account Status Issues on Your Credit Report
Once you know the accounts on your credit report belong to you, it’s time to look at the account status. Focus on things like:
- Accounts that you closed that still remain open
- Accounts that show late payments that you did not pay late
- Inaccurate dates for the last payment made
- Inaccurate dates for when you opened the account
The issue that you encounter will determine how you should proceed. For example, if you closed an account but it still remains open, you will contact the credit bureau and provide the documentation that you closed the account. If your credit report shows late payments that you paid on time, you may have to contact both the creditor and the credit bureau to resolve the situation. Involving both the creditor and the credit bureau in the issue can help you get the issue resolved faster.
Account Balance Issues
Sometimes your account balances don’t reflect how they should. A creditor may not report a balance that you paid off or they may be behind in reporting payments you made, which make the balance higher than it should be. You may even find that your available balance or total credit limit are reported wrong. Each of these issues will cause a problem with your credit score as they could affect your credit utilization rate.
It’s a good idea to pull your credit report at least once a year. You are entitled to a report from each of the three credit bureaus each year. You can request them all at once and compare them side-by-side or you can request one at a time, giving yourself three chances to review your credit throughout the year.
Staying on top of your credit is the most important thing you can do for your financial health. If you have errors reporting on your credit report, it pays to get them corrected right away. If you don’t have errors, but have negative information reporting, it’s important to make things right and get your financial health back on track so that you can get the loans you need in the future.