I bet you didn’t know that around 80% of all credit reports contain some kind of inaccuracy. Unfortunately, depending on the number and types of errors, this can have a serious negative impact on your score. What’s more, this can cause you to end up paying more for loans and credit cards. Some of these errors can be pretty serious. For instance, you might find false delinquencies reported, or even accounts that don’t belong to you at all!
Some typical errors on credit reports are:
41% of reports have incorrect personal demographic information which includes it being outdated, or misspelled.
20% of credit reports don’t show information for major loans or mortgages. Since good payment history on these loans gives your credit rating a boost, this can lower your overall score.
26% of credit reports show accounts that are inaccurately listed as open or “closed by credit grantor,” rather than closed at your request. This can make it seem as though the creditor had cut you off, probably reducing your score.
So what is your best course of action?
Get a copy of your credit report! Start looking through it completely. Yes, this means look at the identifying information such as your name, address, date of birth, social security number, etc. It’s insane that we have to be concerned with the most basic information, but that’s life.
Be sure that you look at each and every one of the accounts listed from start to finish. Make sure that all the information is recorded correctly for the account. Especially the credit limits, current balances, date it was opened, date of the last activity, etc.
Don’t overlook the creditor inquiries section to find out which companies have been reviewing your credit history. If you see companies listed that you don’t recall applying for credit from, you should contact these companies right away and verify that someone hasn’t been using your personal information to apply for credit with some kind of identity theft scheme.
After you have completely reviewed your report, if you have found any errors, you have a few options on how to correct those errors. You can delete them yourself with dispute letters to the appropriate creditors or credit bureaus, or hire a company to guide you with this, or you may even hire an attorney.