Your credit report affects you in many areas of your life – not just when you want to apply for a new loan. It could affect your chances to get a job or even secure new services. Because of this, you need to keep a close eye on your credit report and take care of any credit report errors you find.
You might think there is no chance you could have errors on your credit report, but you can. It’s more common than you think. The best way to catch the errors and/or prevent them is to request your free credit report at least once a year.
If you do find any of the below errors, it is very important that you fix them as soon as you can.
Believe it or not, you may find accounts that don’t belong to you on your credit report. It’s just a matter of a mistyped social security number or name and before you know it, you are the proud owner of a debt you never took.
When you go through your credit report, make sure you truly own each of the debts listed. If you don’t, you’ll have some legwork to do.
First, you must determine if you were a victim of identity theft. Is there more than one account on your credit report that doesn’t belong to you? If so, start looking into the possibility of identity theft. If you have one account that doesn’t belong to you, though, chances are just the victim of a mistake.
You’ll need to contact the reporting credit bureau and report the mistake. The credit bureau will then look into it with the creditor. If they can uncover the mistake, the account will be removed from your report and you can move on with your life. If they can’t find the mistake or they take too long, you may have to contact the creditor yourself to clear up the confusion.
Poor Payment History
Pay close attention to the payment history reported for each of your accounts. Does any creditor claim you made a payment late? If you didn’t, you need to contest it. If you did, the best thing you can do is make sure to bring your accounts current.
Assuming your payment wasn’t late, you’ll need to supply the creditor with proof you made the payment on time. This could include a canceled check or credit card statement with the date of payment on it. You may also provide the creditor with their own statement if you have one showing the on-time payment. These credit report errors are often human mistake and by supplying the correct information, you can usually get it cleared up quickly.
Accounts Belonging to an Ex-Spouse
Divorce is complicated, especially when it comes to splitting assets and liabilities. If there are liabilities that your ex-spouse now has ownership of, but they still report on your credit report, it could be hurting you.
You will need to clear this up with the credit bureaus reporting the information. Sometimes it’s just one bureau, while other times is all three of them. The easiest way to get the information cleared up is to provide the bureau and/or the creditor with a copy of the divorce decree. If it spells out which party is responsible for which debts, the credit bureau can easily change the errors and remove the account from your history.
Wrong Reason for Closed Accounts
Typically, you shouldn’t close old credit accounts because the older the accounts become, the more they help your credit score. However, if you do close an account for some reason, you’ll need to see what the credit bureaus have to say about it.
If they marked the account ‘closed by grantor,’ it could severely damage your credit. When new lenders look at this information, they see that you are not a good risk. If, however, you closed the account because you didn’t want the temptation of having the credit at your disposal, that doesn’t harm your credit score.
You will need to contact the credit bureau to discuss your options for correcting the information. If you wrote the creditor a letter requesting them to close the account, this could be your proof for the credit bureau. This is why it’s important to keep all correspondence with any creditors handy because you never know what might happen in the future.
Finally, you may have old debts that should not be on your credit report any longer. After seven years, old, negative debts must fall off your report. If they are still hanging on, you can contest to have them removed. You won’t need proof of the debt being paid off or anything since the statute of limitations has expired, the bureau no longer has the right to publish that information.
Credit report errors can be very damaging to your credit score as well as time-consuming to get fixed. Practice your due diligence with the credit bureaus, always following up after they agree to fix the errors to make sure it was actually done. It may take a few months before you see the change, but always stay in contact with the responsible parties to make sure it happens.