Credit Report: How Accurate is Yours?
Your credit report contains important financial information that affects the likelihood of obtaining loans in the future. Whether you need to apply for an auto loan, a mortgage, or even a credit card, this report will be important.
Lenders are responsible for updating the information on your credit report, but mistakes are sometimes made. You also have the responsibility to check your credit report yearly to ensure there are no inaccuracies that could be impacting your score.
Every Reporting Agency is Required by Law to Provide Free Credit Reports
In 2013, the Federal Trade Commission found that 5% of consumers had inaccurate credit reports. The FTC also found that these inaccurate reports can drastically change credit scores. Since then, significant steps have been made to protect consumers.
You are entitled, by law, to a free copy of your credit report once every 12 months. Equifax, Experian, and TransUnion are the three credit bureaus that operate in the United States.
To comply with the law, these companies operate a single website where you can request your annual credit report.
What to Look for When Verifying Your Credit Report
To avoid a bad credit score resulting from inaccurate information, you will need to check your three reports in detail. The following information can be disputed if it is inaccurate:
- Your personal details like name, address, employment status etc.
- New and open credit accounts.
- Late payment records. These can be highly damaging to your credit score.
- Collection activity.
- Public records such as bankruptcies, judgements, etc.
- Credit inquiries that you did not authorize.
Checking this information is useful to ensure that bureaus keep accurate records of credit that you knowingly applied for. You can also use your credit report to determine whether somebody has used your details to fraudulently obtain credit.
What to Do if Your Credit Report is Inaccurate
It’s important to act as soon as you find inaccuracies on your credit report. You can dispute inaccurate information online with any of the three reporting agencies. Start the process by clicking on the links below.
You’ll need to put in some time to review your report each year and raise disputes when necessary. Keeping an accurate credit report will protect you from fraud, identity theft, and ensure that you have credit options when you need them.