Credit Report Errors
Most everyone realizes that some credit reports may contain errors, but did you know that according to some experts, as many as 80% of credit reports could contain errors.
Many different types of credit report errors have been found on consumer credit reports. These errors include personal identifying information, account information, missing and/or cross reporting. While some errors may not create problems for you, some can. There are many different types of credit report errors and most may not be recognized as any more serious than others, but all errors can impact what someone sees when reviewing your credit report, how your credit report is used, and how well your credit report works for you to accomplish your financial goals. Credit scores are based on the information found on a credit report. When a credit report lists erroneous information it can affect your credit score and as a result, affect your ability to get credit and/or preferred interest rates and terms.
Specific errors will impact your credit report in various ways. Personal identifying information, such as name, current address, date of birth, or social security number may be entered inaccurately and continue to list in error on a credit report with the potential to limit the ability of a lender to recognize you when you apply for credit. Errors in account information, in particular credit limit, balance, terms or status (including delinquency, public records, or judgments), carry a substantial negative impact due to the influence or weight in determining your credit score. Other errors that can influence your credit report and credit score include timeliness in removing old information, missing information from accounts with good repayment history, or cross reporting – when someone else’s information appears on your report.
It is largely due to error frequency on credit reports that it is recommended to review your credit reports on either a six-month timeline for all reports or 1 every 4 months when you utilize AnnualCrediReport.com for your 1 free from each of the agencies. Through frequent monitoring of your credit report you are able to file complaints to correct errors in a timely manner. In addition, active credit report monitoring is the most effective means available to screen for identity theft. Timely action on suspicious activity on a credit report is essential for effective resolution to the problem.
While everyone can learn to read, monitor and review their credit reports. Some consumers may ignore or decide that the issue of credit report errors is not a priority for them. Some may decide it would be more convenient to hire a company to monitor the report for them. Rest assured there are numerous companies willing to do this for you. However, use extreme caution if shopping for a monitoring company. As always, research not only the cost, but also the company’s history and how they will use your personal information as well. There are companies who will offer to correct information or remove derogatory items from your credit report. As a smart consumer, you know that accurate derogatory information will not be removed, and that some of these companies’ suggestions to you (for example, obtaining a new social security number for this specific purpose) are illegal. Consequently, active monitoring and careful review of your credit report is no longer a luxury for most consumers, but rather a smart way to ensure your credit report works for you in your efforts to achieve your financial goals and make smart financial decisions.