Different Types of Errors on Your Credit Report & How to Spot Those Errors
Your credit report is supposed to be a screenshot of your credit history and that implies it would be containing all the information of the loans and credit cards issued in your name along with meticulous details pertaining to payment history, bankruptcies, and previous judgments. You know that a good resume helps you in getting a good job. Similarly, an impressive credit report comes in handy in securing a loan. In this context, you must understand that if your credit report demonstrates some red flags obviously, lenders would be having second thoughts about approving your loan fearing that you would not return the borrowed amount.
There are three major credit bureaus that publish three different credit reports for you. The top three credit reporting agencies are Experian, TransUnion, and Equifax. You could get these reports once every year free of cost at AnnualCreditReport.com. As per https://www.bankrate.com, each of these reputed credit reporting agencies is known to maintain files on over 220 million consumers based in the United States. The credit bureaus are relentlessly striving to do their very best to achieve 100 percent accuracy in providing credit history details and associated information. However, the sheer volume of data and files seems pretty daunting and there is certainly a major scope for undesirable mistakes.
Common Mistakes That You Get to See on Credit Reports
- Wrong personal information
- Erroneous payment history
- Accounts that are not yours
- Closed accounts shown as open
- Duplicate accounts
- Outdated credit limit or balance information
Few Tips to Locate Mistakes on Your Credit Report
Focus on Getting & Analyzing All Three Major Credit Reports
You may assume that it is enough to catch hold of just one of your credit reports from any of these three major credit reporting agencies. However, it is mandatory on your part to examine all three of the credit reports available online. That is simply because there could be certain differences and they are not necessarily identical to one another. Lenders are not needed to provide all your credit and payment history details to each and every credit bureau. That implies that each credit report would be demonstrating a diverse list of accounts, necessitating you to review all three to get a comprehensive and clear picture. As these reports are generated by the top three different organizations, errors in one report may not be reflected in the others. If you want to make sure that your credit report is error-free and consistent across all platforms, you need to examine all three. You could not only get a TransUnion free credit report, but you could also, get free credit reports from both Experian and Equifax too.
Keep Track of All Your Personal Information
One of the most important things you must check while reviewing your credit reports is your personal identifying information. Check the spelling of your name, your social security number, and any other data that identifies you personally. Errors in this area are extremely common and can cause major issues in the long run, such as having someone else’s finances show up on your report.
Check this very carefully, because if it isn’t corrected post haste, it might become part of your record. There have been several cases where a social security number being off by just 2 characters (94 to 49, for instance) can mean a completely different set of financials show up on credit reports. This can be easy to miss if you aren’t careful, but will cost you in the long run.
Check Every Single Account That Is Listed
You must have a look at all the accounts listed on the report and verify that each of them is yours. It’s quite possible that accounts from your past that you have closed already show up, of course, since it is normal for closed accounts to show up on credit checks for as long as 10 years after they have been closed. As long as the specifics are alright, they are fine to stay. The ones you really need to address are accounts that do not and never have belonged to you. This seems like a fairly straightforward task but might not be, especially, if you have several lines of credit.
Sometimes a lender can have several different service providers on the backend who handle their finances, and it is the service provider that will show up on your credit report rather than the middleman acting as your lender. A lot of retail stores extend credit cards through third-party banks or credit unions. When you review your credit report, you are likely to find these agencies and banks listed rather than the store you would expect to find. As long as you are able to identify each account individually, things will be fine. Make sure to clarify and have any rogue accounts removed in time.
Monitoring your credit reports consistently and making sure that they are containing error-free and accurate information regarding your credit history, is certainly one of your greatest responsibilities for maintaining financial well-being and stability. Small mistakes too, could make a huge difference and prove to be an important determining factor for a loan when you apply for it the next time.