Your credit report is a crucial document that lenders, landlords, and even employers may check to assess your financial health. However, errors can occur in your credit report, which can negatively affect your credit score. Let’s go over why your credit report matters and how you can dispute credit report errors to maintain a healthy credit score.
Why Your Credit Report Matters
Your credit report – have you checked it lately? Most people haven’t glanced at their report in years, if ever. But this confidential record maintained by the credit bureaus holds key information that can impact your finances in big ways. Here’s why you should care about your credit report and review it regularly:
Get a Clear View of Your Credit History
Your credit report lays out your credit accounts and how you pay your bills. It shows late payments, defaults, bankruptcies – anything that gives lenders an idea of how you manage debt. This payment history is a major factor in calculating your credit score.
See How Lenders View Your Creditworthiness
Lenders review your credit report and score to decide whether to approve you for credit and at what interest rates. Good credit means better chances at approval for credit cards, loans, mortgages, rentals, and more. Make sure your report accurately reflects your creditworthiness.
Check for Mistakes and Fraud
Errors like duplicated accounts or mistakes in your personal details can bring down your score. Worse, signs of fraud or identity theft may be lurking in your report. Routinely reviewing your record allows you to dispute and correct any inaccuracies right away.
Monitor Your Financial Accounts
Your credit report lists all your credit cards, loans, and other accounts. Give this list a quick check to confirm all your accounts are legitimate and there are no surprises. Also verify credit limits, balances, and account status are all correct.
Observe Financial Habits and Changes
Notice when you tend to miss payments, take on additional balances, or apply for new credit. Watching patterns over time can help you identify issues to improve. And you can see how major life events like buying a home affect your credit standing.
Credit reports contain powerful information that can enhance or hinder your financial health. Make it a habit to check your records from each bureau once a year or when applying for new credit. Knowing what’s in your reports is the critical first step to building and protecting your credit.
Common Credit Report Errors
Your credit report plays a key role in your financial life, so it’s essential that all the information it contains is accurate. Unfortunately, errors can pop up in credit reports more often than you’d think. Here are some typical mistakes to look out for:
Mixing You Up With Someone Else
One of the most common credit report errors happens when the credit bureaus accidentally merge information from someone who shares your name. You may suddenly find unfamiliar accounts or debts that don’t belong to you. This usually happens because of the sloppy matching of names or social security numbers.
Incorrect Personal Details
Simple things like wrong birth date, misspelled name, old address, or incorrect employer information can plague your credit report. These not only create confusion but also make it harder to verify when applying for credit.
You may find the same past-due medical bill or collection account listed multiple times on your report. This makes the debt seem larger than it really is.
Late Payments When You Paid on Time
Your credit report might falsely indicate you paid bills late that you remember paying on time. This can happen if furnishers don’t update the bureaus properly or if the dates get mixed up in reporting.
Inaccurate Account Status
Closed accounts can incorrectly appear as open and past due. Or accounts you closed voluntarily continue to show up as charged-off. These kinds of errors make your payment activity look worse than it is.
Improper Credit Limits
Is your credit limit showing as higher or lower than you know it to be? Incorrect limits can negatively impact your utilization ratio and credit scores.
If identity thieves open accounts in your name, you’ll see the fallout on your credit report. Make sure you don’t overlook signs of unfamiliar accounts or debts that could indicate fraud.
The best protection against credit report errors is routinely checking your reports from Equifax, Experian, and TransUnion. If you spot any mistakes or suspicious activity, dispute the information right away to protect your credit standing. With some vigilance, you can keep your reports accurate.
Dispute Credit Report Errors
Step 1: Obtain Your Credit Report
- Get a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) via AnnualCreditReport.com.
- Review each report thoroughly for any inaccuracies.
Step 2: Identify and Document the Error
- Highlight or circle the inaccurate information.
- Gather any documents that support your dispute. This could include bank statements, payment records, or identification documents.
Step 3: Contact the Credit Bureau
- Write a dispute letter detailing the errors you found. Include copies of supporting documents.
- Send the letter by certified mail with a return receipt requested, so you have proof of what the credit bureau received.
- Keep copies of your dispute letter and enclosures.
Step 4: Contact the Information Provider
- Write a similar letter to the company that provided the inaccurate information (the creditor).
- Send by certified mail, with a return receipt requested.
Step 5: Wait for the Investigation Results
- The credit bureau typically has 30 days to investigate your dispute.
- If the dispute is resolved in your favor, the credit bureau will adjust your credit report accordingly.
Don’t Let Errors Cripple Your Credit
Dealing with mistakes or fraudulent information on your credit report can feel overwhelming. But if you leave these errors unaddressed, they can negatively impact your credit standing and your finances. The good news is that with some persistence, you can get inaccuracies removed from your credit records.
However, if you are struggling to fix your credit report errors, you can always reach out to our credit lawyers for help. We can draft credit dispute letters and send them to credit reporting agencies for them to investigate. If it comes down to it, we will file a lawsuit against the bureaus to get them to remove the inaccuracies on your credit report.
Call us at (818) 797-9435 or fill out our contact form for a free consultation. We’ll go over your situation and see if we can help.