Credit Reports: Inaccuracies Can be Costly
by John Ulzheimer for Credit.com
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.
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