by Lyle Daly | Feb. 13, 2020
It's a lot easier to check your credit report when you know what the typical errors are.
You've probably heard about how important it is to check your credit report for errors. An FTC study found that one in five consumers had errors on their credit reports, and since you're entitled to a free report annually from each of the three credit bureaus, it makes sense to review yours regularly.
So you do what the advice says and request your credit reports from Equifax, Experian, and TransUnion. That leads to one question -- what exactly are you looking for?
To help you catch any errors on your credit report, here are the most common.
A good place to start is your personal information, including your name, address, and phone number. If any of this is incorrect, it could mean that the credit bureau has mistaken you for somebody else. In that case, it may also have accounts that belong to the other person listed on your credit report.
Your report could have the same credit card or loan listed multiple times. This can lead to inaccurate information regarding your:
Those inaccuracies can negatively affect your credit score and make it more difficult to get approved when applying for new credit.
If there's an account you didn't open on your credit report, it could be an indicator of identity theft. Criminals often use another consumer's personal information to open credit cards or apply for loans, which is known as new account fraud. From 2017 to 2018, reports of credit card new account fraud increased by 24%.
Another possibility is that someone else's account ended up on your credit file. This does happen, especially with consumers who have the same or very similar names.
You may have an account that was closed but is still listed as open, or vice versa. This can affect your credit utilization, total debt, and the average age of your credit accounts.
When creditors report account statuses to the credit bureaus, they also report if an account is current on its payment or delinquent, meaning the payment is 30 days or more past due. Since payment history is such a big part of your credit score, an account that's incorrectly reported as delinquent is something you need to fix immediately.
Creditors generally report balances once per month, so you should go over these to ensure there aren't any discrepancies. An incorrect balance could lead to your credit utilization appearing higher than it should.
You should verify that all your credit cards have the correct credit limits listed. This is especially true if a credit limit has gone up recently, because the card issuer could mistakenly report the old limit to the credit bureaus. If a credit limit isn't accurate, it can negatively impact your credit utilization.
In addition to checking that your accounts don't mistakenly have a delinquent status, make sure there haven't been any incorrect late payments reported in the past.
There are time limits for how long items can remain on your credit file. For example, a Chapter 7 bankruptcy filing can stay on your credit for 10 years, and a Chapter 13 bankruptcy filing can stay on your credit for seven years.
While items should come off your file automatically after this timeframe, that doesn't always happen. If you have any negative items on your credit file, you need to know how long they can legally remain there and call to get them removed if that doesn't happen automatically.
If you find an error on your credit report, you should dispute it with the credit bureau that issued the report. All three credit bureaus let you file a dispute online. Depending on what you're disputing, it may help to provide supporting documents. For example, if you have an erroneous late payment on your credit report, you could provide a payment confirmation showing that you paid on time.
The credit bureau will conduct an investigation. Assuming it finds that your dispute is valid, the error will be removed from your credit report.
While filing a dispute is simple enough, the investigation process can take time. That's why you should monitor your credit and check your credit report at least once per year. By staying on top of your credit, you're more likely to catch errors before they cause problems in your life.
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