4 Common Credit Report Mistakes, and How to Fix Them

Consumer protection, Money, Tips & how-to

credit report mistakesYour credit score can rule your life. Since determining your score involves algorithms that could make your head spin, you might not bother looking into what’s affecting it. Fortunately, boosting your score could be as simple as correcting mistakes on your credit report.  Here are common credit report mistakes few to look out for.

1. Wrong Guy

If someone with your name or a similar one has a loan at the same bank you do, it’s easy for mix ups to happen. When checking your credit report, look for variations in name spelling, names you’ve never used, different street numbers, or an incorrect Social Security Number. Such mistakes could reflect typos in a lender’s records, but they could also be a sign of identity theft.

2. Unauthorized Credit Checks

Pulling your credit without your permission is a big no-no. Since too many inquiries can hurt your score, it’s important to make sure you haven’t become a victim of fraud. A potential employer, for instance, can’t run a credit check on you without your permission. Also, if your employer decides to take “adverse action,” (not hire or promote you, or fire you) as a result of information on your credit report, they must provide you with a copy of that report.  You are also entitled to a free credit report within 60 days of the adverse action — even if you’ve already obtained your annual free credit report.

3. You Paid — They Didn’t Update

Late payments can put a huge dent in your credit score. What’s frustrating is when your on-time payments aren’t reported. Generally it takes about 30 days for a credit transaction — a purchase, a payment or a missed payment — to travel from a creditor’s books to a credit bureau. However, lenders are not legally required to report anything — and the frequency of reporting varies. Some creditors report account balance changes daily, some once a month, and some less often. It could be useful to ask a lender how often they report to credit bureaus before creating an account with them.

4. Outdated Information

Quite often the problem with your credit report is that information is not current. Outdated information such as an address could cause problems with your more recent credit history. Negative marks on your credit may still be affecting your score, despite being old enough that they shouldn’t show up on your report. Even a small fix like making sure your work history is updated can affect your score, so be sure to keep the credit bureaus updated yourself.

Check Your Credit Report Often

About 1 in 5 Americans admit to not checking their credit report. Don’t wait for a loan servicer to deny you to find out your credit is crummy. You can get your own free annual credit report at websites like annualcreditreport.com; then, to dispute the inaccuracy in your credit report, contact the credit reporting agency reporting that information. A credit reporting agency may take up to 30 days to review your dispute  (and up to 45 days if you call back with more information), so be patient. Keep in mind that these reports don’t tell you your score, but that you can find out what is affecting your score.

When to Call a Lawyer

If you suspect you are a victim of fraud — or if a credit reporting agency continues to report inaccurate information — you may want to consider contacting a fraud lawyer to help you settle the matter once and for all. While fixing your credit may seem like a trivial matter, it’s just as important for your financial future as regular doctor visits are for your physical health.