Your credit report is a pretty important document. Not only does it have information about the loans and credit cards you have opened, but it also has details on how you pay your bills.
But credit reports are not always accurate. If yours is wrong, it could prevent you from getting a mortgage or loan, renting a house, and in some cases finding a job.
These errors are quite common. A good 34% of Americans found at least one error on a credit report between February and April of this year, according to a survey conducted by Consumer reports.
If you haven’t checked your credit report for errors recently, it’s time to order a copy and read it carefully. Otherwise, you could be financially penalized without being responsible for it.
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How to check your credit report
You have more than one credit score and, in the same way, you have more than one credit report. This is because there are three reporting offices that collect scores and reports:
Usually the information on your credit reports is the same, but there may be discrepancies, so it’s important to check all three. You can usually get a free copy of your credit report each year from every bureau, but by April 2022 you can get one free copy per week. You can go to each office’s website to request your free copy, or get all three via annualcreditreport.com.
What to do if you spot an error
Credit report errors can range from a misspelled name to showing accounts that don’t belong to you. If you notice an error, contact the office that issued the report and explain, in writing, what the error is.
For example, suppose your credit report shows that you have an outstanding balance on a personal loan that you have paid off. Sending a copy of your loan repayment documents should prove that the debt is no longer applicable.
When you report an error, the credit bureau must investigate it within 30 days. And once this error is corrected, you have the right to ask the issuing office to send an updated copy of your credit report to all lenders who have accessed it in the past six months.
Say you applied for a mortgage three months ago and were turned down because of a red flag on your credit report. Once the error is corrected, the issuing credit bureau should send an updated copy to the lender who denied you, although you may need to request one.
Credit report errors can hurt you in many ways, so it’s worth being vigilant and staying in the know. If you can’t remember the last time you checked your credit report, get a copy ASAP.