Credit Reports: Inaccuracies Can Be Costly

Your credit data impacts a wide range of financial decisions. Credit card, mortgage, insurance and employment decisions commonly use credit report information in the evaluation process. Inaccurate and fraudulent information on your reports could lead to costly increases in your rates. From checking your credit reports for errors to correcting inaccuracies, the following tips show how you can keep your credit reports accurate and healthy.

Tip 1: Check your credit report regularly. Reviewing your credit reports from Equifax, Experian and TransUnion every 6-12 months will help you catch inaccuracies and signs of identity theft early. It’s also a good idea to check your credit reports at least 3-6 months before a major purchase. This early preparation will ensure you have time to make any corrections before they impact your offers.

Tip 2: Know what to look for. It’s usually easy to spot a late payment on your credit report, but there are other kinds of damaging inaccuracies that are harder to catch. Check the balances, date opened, account status, and notes for each of the accounts in your report to see if there is anything strange reported. Also check for inaccurate public record and inquiry reports. Even small inaccuracies can have a dramatic effect on your credit score.

Also note that some inaccuracies don’t have a major impact. Small typos and errors in your address, employment or birth date will not damage your credit score. Remember: you can only dispute to have inaccurate information removed from your report. Accurate records remain on your report for a 7-10 year period, as specified by law.

Tip 3: Report the problem right away. It’s important to dispute an inaccuracy as soon as you spot it. In most cases you can do this by simply contacting the creditor that reported the mistake. They will make the correction and send it to the credit bureaus with their next update.

If you can’t make the correction directly with the creditor, you can submit a dispute to the credit bureaus to have the record investigated and removed. You can either send your dispute online or by mail. Our online dispute letter template can help you get started. Once the credit bureaus receive your dispute, they have 30 days to investigate and make a decision to correct the record in question.

Keeping your credit reports accurate and up-to-date will help you be prepared for your next big purchase. Check your credit reports for inaccuracies and signs of identity theft.