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Is Your Credit Report Riddled With Errors?

Credit ReportAccording to an article on the website Bankrate.com there is even more evidence regarding the imperfection of credit reports. This article reported a Findlaw.com study that had found 23% of those who responded had discovered outdated or incorrect information in their credit reports such as late payments, a bankruptcy or inaccurate personal information. In addition, some said they had found identity theft or information on their reports that actually belonged to someone else. And others felt that their credit scores had been calculated incorrectly or that they had been refused credit because of errors on their reports.

The good news

About the only good news that came out of this study was that more than 66% of those who had found problems on their reports were able to get them corrected. In fact, less than 20% were not able to get their credit report errors corrected at all.

Check your credit report annually

What this study, along with one done by the Federal Trade Commission, underscores is the fact that you need to get and check your credit report every year for mistakes. You can get all three of your credit reports at the website www.annualcreditreport.com or individually from the three credit reporting bureaus – Experian, Equifax and TransUnion.

Not as exciting as a Stephen King thriller

Reading a credit report is certainly not as exciting as reading a thrilling novel but it can certainly have a better payoff. When you review your report you need to look for those items that could have a seriously negative impact on your credit score. This includes defaults, charged-off accounts, collections and bankruptcies. You should also look for accounts listed as “paid derogatory,” “paid charge-off,” “settled,” or anything other than “current” or “paid as agreed.”

If you find errors

If you find an error in one of your reports, you can dispute it. All three of the credit bureaus have online dispute forms you could fill out. Be aware that you may be required to include documentation supporting your claim. The credit bureau is required by law to investigate your claim. The way it does this is by contacting the creditor and requesting that it verify its information. In the event that the creditor cannot verify it or just doesn’t respond within 30 days, the credit bureau must delete it from your credit report.

The one catch

Unfortunately, there is one catch to getting erroneous information deleted from your credit report. It is how creditors are required to verify their information, which is defined very loosely. In effect, all they have to do is respond to the credit bureau by saying, yes, this information is correct. This is why it’s important that you have rock solid documentation proving that the information is erroneous.

Your credit score could get a healthy boost

Here’s an example of why it’s important to review your credit report. Let’s suppose you found a default that had been erroneously reported to one of the three credit bureaus. If you were able to get this corrected, it could boost your credit score by anywhere from 50 to 80 points. This could increase your score from 650 to 700 (or better), and move you into the category of a “good credit score”. In turn, this could save you hundreds or even thousands of dollars in interest or even get you a lower premium on your auto insurance.

Where to get your credit score

When a potential lender pulls your credit score it is almost always your FICO score. And there is only one place where you can get this score – at the website www.myfico.com. Alternately, you could get what’s called your Vantage Score from one of the three credit bureaus. This score is based on a credit-scoring model developed jointly by the three credit bureaus. While it won’t be your true FICO score it should give you a reasonably good idea of your credit worthiness. Plus, you can probably get your Vantage Score free.

Read the complete Bankrate  article by clicking here