A credit report shows a person’s entire financial history from the date when they open their first credit card to the present day. The report contains information including all open and closed credit accounts, mortgages, loans, etc. A credit score can suffer from late payments, unpaid credit card balances, and defaults.
But, what if your credit report contained harmful information that was completely inaccurate? This is a more common occurrence than one would think. A 2004 study estimated that as many as 79% of credit reports contained some kind of factual errors.
A large percentage of these errors were less harmful things like the misspelling of a person’s name or an incorrect address. But overall, 30% of all credit reports contained serious errors that might cause a consumer to be denied a loan or new credit. This makes keeping close tabs on your credit report an absolute necessity.
How Can You Check Your Report for False Information?
Consumers are constantly being barraged by “Free Credit Report” advertisements on television and the internet. Unfortunately for us, these services are not free. The marketing campaign serves as a gimmick to get people to sign up for credit monitoring, then receive a credit report after purchase.
Credit monitoring is a service that alerts people when new credit accounts are opened in their name, or other changes are made to a person’s credit history. This may be a helpful service if you are very concerned about identity theft, but some experts think that keeping tabs on your credit report a couple of times a year is sufficient. The costs for credit monitoring can range from $5 – $30 a month.
The best place to check your credit report without having to pay a single cent is transunion.com. This is a website that was created in response to the Fair Credit Reporting Act. It is run by the three major credit bureaus and gives everyone free access to their credit reports once per year. This website is straightforward to use and takes about 5 minutes to receive your information for the three bureaus.
More than half of Americans check their credit scores at least once a month, making them feel more confident in their financial future. Are you one of them?https://t.co/l4ACNO59ON pic.twitter.com/Zj3G7NOsPg
— TransUnion (@TransUnion) March 12, 2020
Once you have access to your three reports, you can inspect them to see if the information is accurate and if any of them are negative credit items. Make sure all closed credit accounts correctly show up on your report as closed. Another error that was shown to be on reports was a double listing of accounts like mortgages or credit cards. Make sure all the data in each of the three reports reflect your actual financial status.
What To do If You Find False Information
If you find information that you do not believe is correct, you can send a dispute letter to the offending bureau. This dispute letter should contain a copy of your report with a written letter that clearly states what errors are in the report.
You should also include any documentation that supports your claim. This letter should be sent certified mail, so you have proof that the credit bureau received it. Your claim will usually be investigated within a month, and the company that is responsible for the specific credit account will be contacted.
If the claim is found to be invalid, the company that made a claim must contact all three bureaus and ask them to make the necessary changes. Read this article to know how to repair your credit score.
Even though credit report errors are widespread, there are ways to have these errors fixed. If you still aren’t quite sure how to handle the situation with credit report errors, the FTC provides a sample dispute letter here, along with some more detailed information to help you out.