A lot has been said about the importance of positive credit report.That’s fair enough! Opening up opportunities and contributing to your savings & other financial benefits, a good credit report is like a bonus that you wouldn’t like to risk.
But, do you know that sometimes credit reports reflect negatively for reasons that you may not even be aware of?
Well, mistakes in credit report or credit score are common occurrences. But, what is worst is that if they go unnoticed or not rectified on time, it leads to wide-ranging consequences. It can impact your creditworthiness negatively and disqualify you from availing benefits like lower interest rates on loan, greater loan options and more.
Common Errors that Occur in Credit Report
- Identity errors
There are chances that your identity may be confused with another customer with a similar name. Identity errors may also occur due to misspelling of your name or incorrect contact information like address and phone number. These errors should be corrected to avoid future hassles. Also, make sure to update your information when shifting to another house or changing your name and phone number.
- Accounts related errors
This takes place when your account status is reported incorrectly. Among all the inaccuracies, missed and late payment dates are quite alarming. If not taken cognizance of, you may end up defaulting on your payments and can cause your credit rating or credit score slip down significantly. It can happen in the following scenarios:
- When closed accounts are reported as open
- Accounts are wrongly reported as late or delinquent
- Same debt listed more than once (possibly with different names)
- Other errors
There are other possibilities too resulting in faulty credit report. This could be data management errors or miscalculation in balance like inaccuracies in credit limit and current balance.
Steps to Correct Error in your Credit Report
- Get a copy of your credit report: Every customer is entitled to request a copy of credit report once every 12 months from credit reporting companies.Obtain your credit report copy and get familiar with your credit history details.
- Review your credit report and confirm the errors: Scan through your credit report. Figure out mistakes and gap in the credit check Personal information errors typically don’t affect your credit score;they can actually alert you to a reporting issue or possibly identity theft.
In any case, be alert and make sure not to skip out the following errors:
- Personal information: your name, current and previous addresses, your employer, etc.
- Public records: bankruptcies, repossessions and foreclosures
- Credit accounts: open and closed accounts and payment history
- Inquiries: recent applications for credit will appear on your report and remain on it for 24 months
- Dispute your credit report’s error: Once you find the mistake in your credit report contact the credit bureau that you got your report from and request a correction. You can even visit their sites to collect information on directions and details on how to file disputes with the bureau -online, by phone or by mail.
Note : On receiving the letter of dispute, the bureaus can start with their investigation. They send the relevant information to the information provider who reported the disputed item. The provider then investigates the dispute and reports back to the credit reporting bureau. If your claim proves right, it’s the responsibility of the information provider to notify the four major credit bureaus so they can correct the information in your credit reports.
- Be Vigilant: Reviewing your credit report once a year is a wise move and it is highly recommend. It helps identify discrepancies that could be pulling your score down. CRIF gives you the opportunity to check your credit score and credit report with just a simple click. You can visit the CRIF website to learn about credit information report and free credit score including company credit score.
Everyone wants to have a solid credit score but that calls for some sincere efforts on your part. Be it making timely payments, maintaining a good combination of credit schemes or planning strategically to keep a low credit usage, all are instrumental in maintaining a good credit report and credit score. But, if you fail to address your credit report errors all your efforts can go down the drain. Hence, keep close tabs on your credit reports and dispute inaccurate information at once.