Are you one of the 35 percent of people who have never, ever scanned your credit report for mistakes? Do you have complete faith that the credit bureau and your banks have never accidentally put a mark against your credit score that did not belong there? Or, are you maybe one of the whopping 56 percent of people who simply do not know their credit score, and therefore have no idea as to whether your credit score features glaring problems that make you look financially incompetent?
If you are one of those people, it might be time to start finding out more about your credit score. If you are already aware of an error on your credit score, then perhaps you’d like to find out ways you can fix mistakes you’ve discovered. In 2012, the Federal Trade Commission reported that about 20 percent of participants in a study found errors on their credit reports.
The first thing you should do if there is an error on your credit report is check with other credit reporting companies. For example, if you found the error on the report generated by Credit Karma, check Experian, Equifax, and TransUnion. You may find that the error is only on one report, which means you only have to deal with that one company. If you find that the error is on multiple reports, contact the credit bureau directly.
According to U.S. News & World Report, identity errors are the number one cause of credit report mistakes. Identity errors are different than identity theft, because they are a simple error made by the credit reporting company. In other words, they think John Doe is the same person as Jon Doe, or they confuse family members who may have lived at the same address. This type of error can result in a huge decrease in your credit score, especially if the person with your same name has been less than responsible. A more subtle credit score identity error may occur if a consumer has ever had a linked account with anyone, or if their name was on another person’s account as an authorized user.
Identity theft is a common cause of errors—often major errors—on consumer credit reports. IdentityTheft.gov advises victims of identity theft to first call the credit card company and report the fraud. Next, victims should place a fraud alert on their credit report with one of the credit report companies, which is obligated to tell the remaining two. Once identity theft is recognized, it is a good idea to scour the credit report for specific errors in preparation for talking to the Federal Trade Commission and the police. In addition to reporting the problem to the credit bureau, victims should report it to the FTC and the local police department.
Another common credit report mistake might be a little harder to spot: incorrect account information. This may include an incorrect credit limit or an account showing as open when it is closed. While an incorrect credit limit may not seem like a big deal, it is important to correct it so the part of your credit score that calculates the amount of credit you are using is accurate.
In any situation, try to be as clear and specific as possible with the credit reporting agency or federal department representative with whom you are working. This will not only expedite the process, it will prove to be a less confusing experience for you. Creditcards.com advises against discussing all of the errors in the same letter, and writing each letter from scratch. Using form letters that sound official will not get the consumer any further than a straight-forward, specific letter, and could possibly only result in confusion.
What happens if you let your credit report go completely unchecked? You may be denied new credit, a credit line increase, or charged higher interest rates. Do your future a favor and check the details of your credit score for errors today.