Common Credit Report Errors You Need to Know About

Common Credit Report Errors You Need to Know About

Your credit report plays a crucial role in your financial life, influencing everything from loan approvals to interest rates. However, errors in these reports are more common than you might think. To protect your financial health, it's essential to regularly review your credit report and know what to look for. Let's dive into the most common credit report errors and how to spot them.

Identity Errors
One of the first things to check is the accuracy of your personal information. Look for:

• Misspellings in your name, incorrect phone numbers, or wrong addresses

• Accounts that don't belong to you but are listed under your name

• Suspicious accounts that could indicate identity theft

These errors might seem minor, but they can have significant consequences. For instance, a "mixed file" occurs when your information gets confused with someone else's, potentially affecting your credit score.

Account Status Inaccuracies
Next, scrutinize how your accounts are reported:

• Closed accounts incorrectly shown as open

• Accounts where you're listed as the owner instead of an authorized user

• Inaccurate reporting of late or delinquent payments

• Wrong dates for last payments, account openings, or first delinquencies

• Duplicate listings of the same debt, possibly under different names

These errors can significantly impact your credit score and financial opportunities.

Data Management Errors
Finally, check the numerical details:

• Incorrect current balances on accounts

• Inaccurate credit limits

Even small discrepancies in these figures can affect your credit utilization ratio, a key factor in determining your credit score.

What to Do If You Find Errors

If you spot any of these errors, don't panic. You have the right to dispute inaccurate information. Here's what to do:

1. Contact the credit reporting company that provided the report

2. Reach out to the lender or company that furnished the incorrect information

3. Follow the dispute instructions provided in your credit report

Remember, maintaining an accurate credit report is crucial for your financial wellbeing. By regularly checking your report and promptly addressing any errors, you can ensure that your credit score truly reflects your financial responsibility.Stay vigilant, and don't hesitate to take action if something doesn't look right. Your financial future may depend on it!

Check your credit report for free at Annual Credit Report

You Can Repair Your Credit Without a Credit Repair Service

Credit repair companies can remove information on your credit report that is lowering your credit score but they cannot remove negative marks if the information is accurate, timely, and verifiable. Credit repair services can cost you around $100 a month, but everything the service does, you can also do on your own. 

Your credit score is calculated from information in your credit reports. A study from the Federal Trade Commission found that 5% of consumers had errors on their credit reports that could significantly lower their scores. 

Legitimate credit repair services check your reports for information that shouldn’t be there and dispute it on your behalf. They may also check to make sure the information does not reappear. Sometimes information that is accurate but cannot be substantiated is removed, but it could be reinstated if it is verified later. 

Errors that can be addressed: 

• Accounts that do not belong to you.
  

• Bankruptcy or other legal actions that were not yours.
  

• Misspellings, which may mix in negative entries that belong to someone with a similar name — or may mean positive entries aren't showing up when they should.
  

• Negative marks that are too old to be included.
  

• Debts that can't be validated and verified.

Using a credit repair service can cost between $79-$129, and the process could take several months to a year. You may also be required to setup a fee to begin. Credit repair services argue that you will save money because of lowered interest rates. It is true that lower interest rates go to borrowers with higher scores but it is also true that you can handle credit repair yourself. 

You can opt to fix your credit report on your own. Here is how: 

• Obtain your credit report: As of now you can retrieve your credit reports for free once a week at www.annualcreditreport.com until April 2022. Check all of your information and verify that it is accurate.

• Dispute errors: As a consumer, you can dispute errors directly with the three major credit bureaus. All three bureaus have an online dispute process, but it is more efficient to send in a complaint by certified mail. This provides proof of service and a real person will have to look at your information.

• Work on your payment history: The biggest factor affecting your credit score is your record of paying bills on time. If you have late or missed payments, that can drag your score down. It is important to bring your late accounts to current as soon as possible and consider writing a goodwill letter asking your creditor to remove the make from your credit reports.

• Use less of your available credit: How much of your available credit card limit you are using is known as your credit utilization ratio. The lower, the better for your score. If you can afford to do so, consider making multiple small payments in the billing cycle to help keep this ratio down.
  

Before deciding to use a credit repair service, know that you can do all of this on your own. It is as simple as looking through your reports and verifying the information without the cost. If you have inaccurate information on your credit report, you may be entitled to a settlement. 

If you find inaccurate information, be sure to dispute the information. If you need help, reach out to us for help in the process. We may also be able to obtain a settlement for you.