Credit report errors are common

Anyone who has spent any time even casually reading about financial matters knows that the credit score is the key component to being extended credit. Your score, which ranges from 350 to 850, is a simple distillation of all that you are financially. The would-be lender looks at it and decides if you are a good risk for a loan, mortgage or credit card. 

The importance of clean credit cannot be overstated, as potential employers and landlords often look at them, too. Unfortunately, a large number of credit reports contain errors. Estimates vary, but the number most often thrown about is that an error occurs in about one out of every four reports. The mistakes may be simple ones, such as a wrong address or phone number, or they may be egregious, such as showing a bankruptcy filing that never happened or showing a bill that was paid in full as delinquent.

These types of errors can cause tremendous harm if you are trying to obtain a loan. What do you do to make sure you have no errors on your credit report?

The first thing to do is obtain a copy of your report from each of the three credit bureaus - Experian, Trans Union and Equifax. Once you have copies of all three reports, you need to compare them to make sure that the information on each one is accurate.

Should you find an error, report it to the bureau or bureaus that are responsible for that report. Do so in writing and offer copies of any evidence that would prove that the information is erroneous. Be sure to send copies; do not send originals! The bureau must investigate the error within 30 days and forward this information to the creditor responsible for it. If the item is incorrect, it must be deleted from your report.

Contact the creditor yourself to report the problem. While the bureaus should contact them, it’s a good idea to be sure they know.

Be aware of errors of omission, as well. If you have paid off an auto loan and that is not shown on your credit report, contact your lender and ask them to notify the bureaus. It is just as important to include good information as it is to delete incorrect information. All of these things add up to a healthy score.

Should you not prevail in having erroneous information removed, you do have the right to include a letter of explanation in your file. If that’s the case, do so. It cannot hurt.

While you can hire companies to “fix” your credit, no one can fix problems that are genuine. If the problems are the result of mistakes on the part of the bureau or the lender, you can easily fix the problems yourself and save some time and money in the process. Once you have done so, be sure to obtain a copy of your report once a year to make sure that errors do not occur again in the future.

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