Your credit report is used to judge your creditworthiness – by potential lenders considering a credit application as well as by potential employers or potential landlords. If there are errors on your credit report, it can be costly for you. It’s important to know not only how to find mistakes on your credit report but also what to do if you find one or more mistakes.
Reviewing Your Credit Report
Since the information on your credit report can have such a big impact on your life, you need to be proactive about periodically reviewing your credit report. You’re entitled to a free credit report each year from the three major credit bureaus (TransUnion, Equifax, and Experian). The easiest way to get them is by requesting them through AnnualCreditReport.com.
Things to Look for on Your Credit Report
Start by reviewing your personal information to make sure your name is spelled correctly. Also, make sure your address and social security number are correct and that there are no old addresses listed that you don’t recognize. Look for balance errors such as a credit limit showing as too high or too low. Check that there are not any closed accounts showing as open, and not any open accounts showing as closed.
Check that opening dates are correct because the age of your accounts has some impact on your credit score. Your payment history is one of the biggest factors being used to judge your creditworthiness. Make sure there aren’t any on-time payments reported as being paid late.
Past Negative Items
Legitimate negative items such as accounts that were more than 30 days late, accounts sent to a collection agency, bankruptcies, or foreclosures remain on your credit report for seven years. Chapter 7 bankruptcy stays on your credit report for 10 years. If negative items are showing that are inaccurate, you should dispute them immediately, and you should also dispute items that are showing longer than the permitted time frame.
Other Errors
It’s important to make sure there are not any accounts you don’t recognize. If there are, you could be a victim of identity theft. Check that there are no accounts showing twice, which can happen if a company changes its name or if there’s an acquisition. If you’re just an authorized user on an account, make sure the account isn’t showing you as the owner of the account. If you’ve already had incorrect information removed in the past, check that it hasn’t reappeared.
Disputing Credit Bureau Mistakes
Each credit bureau has information on how to dispute an error with that credit bureau on its website. You can also file a dispute over the phone if you prefer. If a creditor is reporting incorrect information, you may also want to contact that creditor and ask it to correct its records.
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