When was the last time you checked your credit report? Are you sure its not one of the 46% that contain errors? While some lenders aren’t able to check credit reports, most will perform a proper check when you apply for credit. You might end up getting refused and wonder why it happened.
Your credit score can affect many aspects of your life and that’s why you should know what is on your report and what impact it can have. You need to understand who can access your credit report and how they use it to draw information, in order to make decisions. Only then will you understand why it’s important to check credit reports on a regular basis.
Why you should check your credit report regularly
Many have the right to review your credit report before they provide you with services. For example, mortgage lenders review your credit reports and credit scores from all three credit bureaus as part of the application process.
A prospective landlord or rental company can review your report to look for a pattern of missed payments or other negative information. This kind of information indicates that you may not be a responsible tenant. Therefore, you may be required to put up a larger deposit or you may even get turned down for a rental.
Your credit score can also influence auto loan rates. Auto lenders may review your credit reports and financial history before making a deal with you. Aside from your application data, home and auto insurers usually use credit information to determine rates and terms.
Your credit report and credit score will also be reviewed when you apply for a new credit card. Credit card companies will try to find out if you qualify for a credit card and what terms you should receive. Usually, credit card offers have different rate options for borrowers with different credit standings.
Even cell phone companies can check your credit score before deciding to grant you a service plan. Therefore, it’s highly recommended that you check credit reports regularly and look for any kind of error.
Common errors on a credit report
A good reason to check your credit report is the fact that more than 1,000 people are mistakenly declared deceased every month. Most of them are falsely reported as deceased by their credit card issuer, their bank, or by one of the credit bureaus.
This usually happens when you have a shared account with a family member who has died. However, it’s crucial to report and correct the error as soon as possible since institutions you rely on may assume you are no longer in need of their services.
Another common situation regarding credit report errors is credit reporting agencies making mistakes with names, addresses, or social security numbers. This can result in lack of some credit information or someone else’s credit information appearing on your credit report. In case you are a victim of identity theft, you’ll notice mixed account information on your report.
When people who have been divorced check credit reports, they often find errors related to information from their ex-spouse appearing on the report. You may also find an incorrect payment status for accounts. There’s a legal deadline for removing accounts from your report. However, accounts may still be listed by mistake.
You may experience various types of errors on your report. Each of them can seriously harm your credit score and interfere with your everyday life. So, take some time to check your credit report and ensure there are no errors on it.
How to check your credit report
According to the Fair Credit Reporting Act (FCRA), you can order a free copy of your credit report from each of the nationwide reporting companies, once every 12 months. It means that Equifax, TransUnion and Experian are required to provide a copy of your report at your request.
You can order a free annual report via the website at annualcreditreport.com, telephone or by mailing an annual credit report request form. You will need to provide your name, address, date of birth and social security number.
If you have already requested another copy of your report in the past 12 months, the credit reporting companies may charge you for a second copy. However, in some situations, you are eligible to get a second free report within the 12-month period.
You are entitled to a free report when a company denies your application for credit, employment, or insurance, based on information from your report. However, you have to ask for a copy of your report within 60 days of receiving the notice. You can contact the credit reporting company stated in the notice.
You can also ask for a free report if the report contains errors due to fraud, including identity theft. If you are unemployed and plan to look for a job within 60 days or are on welfare, you can ask for a second free report in that 12-month period.
How to fix credit report errors
You need to contact both the credit bureau and the company or organization that has provided the false information to the bureau. You need to do this as soon as possible, because it will give you an opportunity to fix errors on your credit report quickly. Secondly, both organizations are responsible for correcting errors in your report.
However, you should start by informing the credit bureau about the errors on your credit report. Be sure to clearly point out each item in the report that you dispute, and state the facts and explain why you dispute the item. You should also provide copies of documents that support your statement. Don’t forget to provide your complete name and address.
Aside from pointing out the errors, you need to ask the bureau in your letter to correct or delete them. As soon as the credit bureau receives your letter, they have to investigate the items within 30 days. Therefore, you should send your letter by certified mail with a request for a return receipt. Keep copies of all your correspondence with the bureau.
After you contact the credit bureau, you should contact the organization that has provided the information to the bureau. Inform them that you are disputing the provided information with copies of documents that support your claim – the same ones you have sent to the credit bureau.
The provider will have to include a notice of your dispute if they report the same information to the bureau again. You should request to be copied on the correspondence that the provider sends to the credit bureau. You can expect this process to take around 30-90 days.