When it comes to making a major purchase on something like a home, taking out an automotive loan, or even getting approved to rent an apartment and make a significant move, your credit score is a vital part of the process. This is because landlords and lenders alike use your creditworthiness as a way to determine your trustworthiness to make timely payments and ultimately get approved for what you're applying for. Beyond impacting your eligibility, your credit score also helps you qualify for more competitive interest rates. Having lower interest rates can save you hundreds, if not thousands, of dollars over the lifetime of a loan, meaning that you have more money to use the way you'd like.
Obviously, with so much importance placed on your credit score, you must understand what your score is and how to improve it. However, when monitoring your credit report, you may find that a late payment or another piece of negative information impacting your score is not accurate. Having inaccuracies on your credit report may seem like a minor problem if it's just an incorrect name. Still, in some cases, credit report errors can be pretty severe — and a sign that you might be a victim of identity theft. In either case, you must know what to do when there's a problem with your credit report.
Now that you know how important your credit report is, what path should you take if you find a discrepancy in your report? The good news is that various laws passed by the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), and legislation such as the Fair Credit Reporting Act, you have a right to both obtain and challenge information about your credit score and report. The first step is to take a look at your credit report. Keep reading to understand your credit report and how to fix any errors.
- How to find errors on your credit report
- Common inaccuracies to look for
- How to dispute errors on your credit report
- The bottom line
How to find errors on your credit report
To know whether or not there are issues with your credit report and improve your personal finances, you've got to know what's on your credit report in the first place. Thankfully, it's relatively easy to do this, thanks to the internet. If you do see any problems on your credit report, you'll also be able to submit a dispute letter via a dispute form online to each of the three major credit bureaus (Experian, TransUnion, and Equifax). This will improve your standing with each bureau and likely boost your FICO score in the process.
Use Credit Sesame To Get Your Free Credit Score
- Free Credit Score, Credit Report & Identity Protection
- Use "Sesame Cash" For Online Banking
- 15% Cashback On Everyday Purchases
- $100 In Cash Rewards For Improving Your Credit Score
- Simple & Secure. Sign Up In Less Than 90 Seconds
Receive a free report
When entering personal information online, you want to be careful about the websites that you use. This is especially true for sensitive personal data like your social security number since you don't want to wind up a victim of identity theft trying to monitor your credit for problems like this in the first place! While different websites will help you get your credit report from each of the three credit bureaus, one safe option endorsed by the Federal Trade Commission is AnnualCreditReport.com.
The website for AnnualCreditReport.com does feel a bit dated. Still, it's a secure website recommended by a major government entity and will offer you your full credit report from TransUnion, Equifax, and Experian for free on an annual basis. Remember that any data furnisher you use to obtain your credit report is simply an information provider. When it comes to challenging any potential errors you may discover on your credit report, you'll need to contact each credit bureau directly. (More on that in a bit.)
Another free report tool can be found on Credit Sesame. Not only can you receive a free credit report, but the company provides free credit monitoring and identity theft protection.
Related: Credit Sesame Review — Free Credit Score, Free Credit Report & Free Identity Protection. Yes, Really!.
Keep in mind that you can access your credit report from one, two, or all three of the major credit reporting companies using AnnualCreditReport.com, as well as reaching out directly to the bureaus: Experian, TransUnion and Equifax. While there are some situations when it may make sense to only download a specific report, if this is your first time taking an in-depth look at your credit report, then it's not a bad idea to pick all three. Having each credit report to compare against one another could ultimately come in handy if you need to use a more accurate report to illustrate that there has been an error made on one of your other reports.
Common inaccuracies to look for
Each credit reporting agency uses some automated processes, which can cause problems if there are mixups. That said, some errors are more prone to happen than others, so the information below can help orient you as you start to peruse each document for potential credit report errors. Knowing what to look for, you should be able to review each credit report relatively quickly. Here are just a few of the most common mistakes you may discover when looking at each of your credit reports.
Each credit reporting agency must have the complete picture of you and your personal finances to create an accurate credit report. As such, if you have mission information on your credit report, it could be detrimental to your report. For example, if you submitted a payment during a grace window that's counted as a late payment, that could hurt your on-time payments factor. This is an essential component of your credit score, so if you have a receipt showing that an on-time payment was recorded as late payment, it's a good idea to challenge this problem.
Another form of incomplete information may be an account that's left off of your report. In some scenarios, a newly opened credit line—or even a credit card you've may have been added to as an authorized user — may take a while to show up on your report. If it's a few months old and still isn't showing up in your credit report, it's not a bad idea to reach out to each credit bureau and find out what's going on. The number of accounts associated with your report can play a role in calculating your credit score, so fixing this error could improve your overall creditworthiness.
If, when reviewing your credit report, you see suspicious activity that you don't recognize, you may be a victim of identity theft. For example, if there are loans or credit cards in your name that you have no recollection of opening, your personal information may have been jeopardized, and your credit now is, too. A sad reality about identity theft is that, in some cases, accounts are created by parents or relatives who don't have a good handle on personal finances themselves. Even though you may be related to the person who committed fraud and stole your identity, you must act quickly to address the problem.
Start by contacting your lenders, credit card companies, and banks to tell them that you think you're a victim of identity theft and that your personal information has been compromised. Some agencies will be able to freeze these accounts. At the same time, an investigation occurs, and it's crucial to file reports with the Federal Trade Commission and your local police station to document the theft. It might also make sense to change passwords associated with your banking and other financial institutions, as well as sign up for a credit monitoring service.
Wrong name or address
If you've moved around a lot or have the same name as a relative, it's not uncommon for there to be discrepancies on your credit report related to mixups with this information. A wrong name could inadvertently mean that you have a relative's account on your credit report, while an incorrect address could mean that essential details about a credit line aren't sent to the proper place. Fixing these errors will ensure smooth communication and accurate routing of financial information about you and nobody else.
How to dispute errors on your credit report
While disputing credit report errors on your own can take a bit of time, it's not hard to do. Even if the mistake you find is relatively small, you must go through the proper steps to challenge the error to have a clean credit report. Doing this work now will ensure that you have all of your ducks in a row when you need to leverage your credit score.
Thankfully, the internet makes disputing credit report errors much more straightforward than it used to be. While you can still mail a dispute letter to a credit reporting agency, most people will submit a dispute form online. Remember that you'll need to submit a form for each of the three credit bureaus by navigating to Equifax, Experian, and TransUnion's websites individually. Doing so does take a bit of time, but it means that each agency will update their records and, in turn, your credit report with that bureau.
Unfortunately, fixing your credit report won't happen overnight. Submitting your dispute will cause an investigation to occur, which may take as long as a month to complete. During that period, you'll need to stay patient and be ready to provide any additional details, documentation, or proof of the error, should you be asked for it.
The good news about disputing an error on your credit report is that it only costs time if you do it yourself. Annualcreditreport.com and the dispute forms on each credit bureau's website are free to use, although you may need to make an account at TransUnion, Equifax, or Experian to file a dispute.
One thing to look out for is a credit bureau trying to sell you information about your credit score when you look at your report. Keep in mind that your credit score is calculated using your credit report and won't give you any important details to evaluate for their accuracy one way or another. As such, you don't need to pay to receive your credit score as a part of reviewing your report and challenging any errors.
Hire a repair company
In some situations, you may feel overwhelmed or incapable of filing a dispute on your behalf. Especially if you've been a victim of identity theft or feel like there's a high volume of problems with your report, there's no shame in working with a third-party service to file your dispute for you. Mainly if there are old collections items that you'd prefer not to have on your report anymore, using a credit repair company could help expedite the process thanks to their knowledge and expertise.
Credit counseling agencies may also be able to provide support if you have problems with your credit report. While a credit repair company focuses specifically on repairing your credit, a credit counseling agency can also help you generate strategies to pay down your debts, manage your budget and personal finances better, and even work with creditors on your behalf to come up with new paydown plans. They're a bit more full-service and sometimes are even free if associated with a non-profit organization.
What to know before you use a third-party service
If you do decide to use another company or service to handle your credit report disputes, make sure that you understand what a company can and cannot do on your behalf. Many of these regulations are set forth by the Credit Repair Organizations Act, or CROA, which guides how a company or organization can help you.
For example, a third-party entity representing you in a dispute can't provide inaccurate information to a credit bureau or lie on your behalf. They also need to offer up a contract that fully details how and what they will do for you. This contract is something you're under no obligation to go forward with, and you typically have three days to decide whether or not you intend to do business with the company or not.
Another vital provision of the Credit Repair Organizations Act is that you shouldn't be charged for your services until completed. Unfortunately, some scammers try to take advantage of those struggling with poor credit or problems on their report, and it's important to never pay for credit repair services until the work is complete. Understanding CROA a bit better ultimately protects you as a consumer by helping you recognize red flags if a company is overpromising what they can do for you.
The bottom line
It's important to monitor your credit report to keep your personal finances in check. This is because the various factors on your credit report impact your credit score and creditworthiness, which can impact your financial options in terms of the different financial products you may qualify for and even the terms of those products. As such, if you ever see any errors in your report, you must know what to do to address the problems.
Thankfully, the internet makes it easier than ever before to learn about what details impact your credit report—and even offers a way to go about disputing any errors you may see. Using a website like annualcreditreport.com and each of the three credit bureau's websites, you can start the process to fix problems on your credit report in as little as an hour. While it may take longer to have errors on your credit report addressed, as long as you're comfortable starting the process, the whole issue can generally be resolved in under 30 days.
Keep the above options and strategies in mind as you review your credit report, and you'll be able to make the right decision for you and your credit.
See How Much Experian Boost™ Can Raise Your Credit Scores Instantly
- Experian® is one of the three credit bureaus providing your credit scores
- Experian Boost is a free feature that can help you increase your credit scores for making on-time payments for your phone, utility, or streaming service bills for 100% free and in minutes
- Average users who received a boost improved their FICO® Score 8 based on Experian Data by 13 points. Some may not see improved scores or approval odds. Not all lenders use credit information impacted by Experian Boost™.
- Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether.
Share this article