How to Make Sure Your Credit Report Is Accurate
Most people know the critical role credit reporting agencies play: keeping tabs on the payment histories of everyone. Most of us also realize how the accuracy of credit reports can affect our daily lives.
Source: Emily Conwell.
In truth, the filing of accurate credit report information by creditors, banks, and other companies is important to each individual because so many parties rely on the information on them in order to make critical decisions.
A good credit report makes your life so much easier. It allows you to qualify for the best loans and mortgages. It can also make getting a new job easier as well as letting you get lower rates on insurance coverage.
With the critical role it plays in the life of the average person, a number of people suffer when inaccurate information gets incorrectly posted to their credit report. In fact, 60 Minutes recently aired a report claiming that about 40 million Americans have errors on their credit reports. This is unfortunate, but it can be corrected.
While some people look for others to blame for inaccurate credit reports, in reality, you are responsible for checking the information on your credit reports and verifying your credit report accuracy. This means you should take an active role in ensuring the information on your credit reports is accurate.
Unfortunately, this is where most people get stuck because they don't know what is on their credit reports or how to correct any errors found on them.
First, you need to know where the information on your credit report comes from, then we can look at how errors happen, and how to correct them before they cause further damage to your report.
How does the information get on your report?
Your credit report is in fact, a compilation of information about you. It contains how and when you pay your bills, credit cards, and loans, as well as how much credit you may have available at any given time. It contains a total of the debts you owe as well as how long you have had particular credit accounts. It may also contain employment histories and a list of your former addresses.
All of this information is collected by the credit bureaus (credit reporting agencies) from your credit card companies, your banks and other lenders, your landlords, and other companies with which you do business. They then sell this information to lenders and businesses that use it to evaluate your creditworthiness.
Now, if you think about it for minute or two, you can easily imagine that with all this important information being passed back and forth, errors can make their way onto your credit report. Most of the erroneous reporting is likely the result of
human error. The person keying in the information makes a typographical error, inadvertently transposes numbers, and so on.
Another more sinister way that incorrect information arrives on your report is through identity theft and credit card fraud. A thief steals your credit card information and begins making charges with it, or even opening new accounts in your name with your identifying information.
The point is, no matter how the erroneous information arrived on your credit report, it is up to you to confirm or deny the accuracy of the information and get it corrected. Here's how.
Get your credit report
You can check your credit report at www.annualcreditreport.com at any time.The Fair Credit Reporting Act (FCRA) allows you to check your report and limits who can access your report without your written permission. Annualcreditreport.com allows you to check your credit reports on a regular basis, whenever you need.
Study your credit report
After you've received your credit reports, it's only prudent for you to examine the information on it. Verify the accuracy of your personal information. Scrutinize the details to make sure that whatever information is on the credit report reflects transactions that you have actually incurred and can verify.
Take action to correct incorrect credit reports
After you've had a good look at your report, if all is in order, you can breathe easy and continue to monitor your reports on a regular basis to keep it that way. If, on the other hand, your credit report is inaccurate, you must take steps to correct it.
Once you report errors to one of the credit reporting agencies, they have 30 days to investigate it. Until they can prove the information is accurate, they must either remove it from your report or note that it is in dispute. If you prove it inaccurate, they have 30 days to remove the error. The credit reporting agency with which you are communicating must then inform the other agencies of the error on your report so that it can be corrected on all three credit reports.
As you can see, getting and checking your credit report on a regular basis can help you in numerous ways. It will not only help you know your present credit status, and thus your eligibility for services you need, but it will also allow you to take action to correct inaccurate information.
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