Your credit report
is used by many different lenders and other entities to make decisions about you.
When it comes to your credit report, it's what you don't know that can hurt you.
Credit card companies, mortgage loan companies, auto loan and insurance companies,
even landlords and employers check credit reports to find out about your past credit.
The reason? They figure if you were responsible in the past, you will most
likely be responsible in the future.
When it's time to consider any sort of financial move - a new home or car, a new
credit card, a new auto insurance policy, even a new job - it's a good time to check
your credit report.
After You Get Your Credit Report
When you get your credit report, review it carefully. If you see something
on your credit report, such as an unpaid bill that you simply forgot about, act
right away to resolve it. Then ask the business to whom you owed the money
to send a letter
to the credit reporting agencies saying that the matter has been resolved.
Also, make sure your credit report is accurate. Check for accounts you didn't
open, charges you didn't make, and delinquencies you didn't cause. If you
see evidence of fraud, contact the credit reporting agencies immediately.
Explain the situation and ask that a fraud alert be placed in your file. Also
report the fraud to the police and obtain a police report.
Your creditworthiness will follow you throughout your life and can help you financially
- or hurt you. Review your
credit report carefully!
Checking Your Report Is Easy
Get the 3-in-1 Credit Report and see your credit history as reported by the three
major credit reporting agencies.
Common Errors on Credit Reports
Credit Scores
The big three Credit Bureaus (Trans Union, Experian, Equifax) do not share information
with one another. Differing scores between the three credit bureaus can result
from one bureau reporting information that is not reporting with another credit
bureau. If your credit
scores vary between the three bureaus by more than 50 points, this could
be an indicator that there is conflicting information that may be in error.
Tradeline Data
In any single tradeline there may be two or three inaccurate pieces of information
that can harm your credit
score. Without expert knowledge of the credit scoring model and the
ability to read tradeline data, you will miss these inaccuracies. Here are
some tips:
Make sure that all credit cards report the proper limit and balance. When
your limits are inaccurately low or your balance inaccurately high, your available
credit is artificially decreased and your scores will drop.
Make sure that each open positive tradeline reports to all three bureaus.
When one bureau does not report positive information that bureau will have a lower
score.
Duplicate accounts and closed accounts reporting as open, will lower your scores
by artificially increasing your
outstanding debt.
Collections
A common error with reporting collections occurs when collections are sold over
and over again to different collection agencies. It is very common to see
one debt reporting several times. Each duplicate reporting may hurt your scores
by 20 points or more. Only the current holder of the debt is legally allowed
to report at any one given time. This problem can only be fixed by contacting
the credit bureaus with a
dispute or waiting seven years for them to fall off.