3 Credit Report Errors That Could Be Dragging Your Score Down
by Maurie Backman | Updated Aug. 28, 2022 - First published on Sept. 19, 2021
It's important to check your credit report for errors since mistakes like these could be really harmful.
You'll often hear that it's important to check your credit report a few times a year. Doing so will help you determine if you're in a good position to apply for a big loan like a mortgage. And it will also give you a heads up if there's fraudulent activity you may have fallen victim to.
In the course of reading your credit report, you may come across errors. Unfortunately, credit report errors are actually pretty common. And these three could end up impacting your credit score in a negative way.
1. Delinquent debts you've already gotten current on
Your payment history -- the extent to which you're timely with your debt payments and obligations -- carries more weight than any other factor when calculating your credit score. So if your credit report lists delinquent accounts, that could easily damage your score.
It's possible, though, to have debts listed as delinquent on your credit report that you've already settled or gotten current on. If you see a debt listed as outstanding and you know you've paid it off, contact the credit bureau reporting that error and provide whatever documentation you have that shows that the debt has been cleared.
2. Accounts you never opened in the first place
Having too many loans or credit card accounts open can be bad for your credit score. So if you see an account listed on your credit report that you never opened, you'll need to investigate.
Your first move should be to call the bank or credit card company behind that account and confirm with them that they show an account listed in your name. If they do, you may have fallen victim to fraud. If they don't show an open account in your name, ask for a letter to that effect that you can share with the reporting bureau in question.
3. Incorrect loan or account balances
Another big factor that goes into calculating your credit score is your credit utilization ratio. That ratio measures how much of your available revolving credit you're using at once.
A higher ratio isn't good for your score, so if your credit report says you have a $5,000 balance on a credit card when you know you only owe $2,000, that's something you'll want corrected. In this situation, providing the reporting bureau with your latest credit card account statement should do the trick if that statement clearly shows that your balance is much lower than the amount listed on your credit report.
Staying on top of your credit report is important, whether you're applying for a major loan or not. It's a good idea to check your report every three months and make sure mistakes aren't hurting you.
Normally, you can request one free copy of your credit report each year from each of the three major reporting bureaus -- Experian, Equifax, and TransUnion. Right now, however, credit reports are free on a weekly basis until April of 2022. So if you want to do a little extra investigating, that's certainly an option worth taking advantage of.
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