In 2004, U.S. PIRG, a consumer-advocacy group, conducted a study concerning the accuracy of information contained in credit reports. What they discovered was shocking. The group concluded 25% of the credit reports contained errors serious enough to lead to a denial of credit. They also found 54% of the credit reports had personal information that was misspelled, outdated, belonged to someone else, or had some other error. With the likelihood there is an error on your credit report, it is a worthwhile task to reveiw your credit information for errors.
Thanks to the Fair Credit Reporting Act, consumers have the right to obtain a free copy of their credit report from all three credit bureaus (Experian, Transunion, and Equifax) every twelve months. It is easy to obtain copies of your reports. You can request them from the bureaus directly, or you can order them online at websites like www.annualcreditreport.com. You will want to order your report from all three bureaus because not all creditors report to the same bureaus and the information they contain may be different.
Once you have all three credit reports, carefully review the information. The reports will have several sections. The first section is for your personal information. Make sure your name, date of birth, social security number, current and previous addresses, and your current and prior employers are accurate.
Once you have verified your personal information is correct, look for the sections concerning public records and account history. Review carefully; these sections are often where you find incorrect or out of date information. If you have collections or judgments which have been paid, make sure they reflect paid here. In the account history section, you will see the payment history for every credit account you have ever opened. You will see the date the account was opened, the initial balance, the current balance, and whether or not you have paid the account as agreed.
The last section to review is the inquiries section. This will be broken down into two types of inquiries: inquiries ran by you and inquiries ran by others. The inquiries ran by you do not hurt your credit. You can look at your credit report any time you want, it is your credit. However, inquiries by others can harm your credit if you have too many of them. Review them and confirm they are correct and were authorized by you.
If you find errors on the reports, you can dispute the errors with the credit bureaus directly. Each credit bureau has an online dispute form, where you indicate what is incorrect and whether you have documentation proving it to be incorrect. If there are multiple errors with the same credit bureau, you can correct them on all on the same request. Once the bureau receives a dispute, they contact the creditor to see if they can verify whether the information being reported is accurate. If the creditor is unable to prove the information is accurate or does not respond, the bureau will remove the information from your credit report. Often correcting a mistake on your credit report can boost your credit rating, which makes it easier to be qualify for financing at low, competitive rates, which saves you money.
Consumers should review their credit reportsoften to make sure the information stays up to date and accurate, and to also protect against identity theft. If you want to review credit on a monthly basis, there are many companies, such as www.detailed3creditreport.com that offer credit monitoring services. These services usually cost around $30 a month and they send detailed information on changes to your credit, from all three credit bureaus, and will send Email alerts when there is a critical change on your credit scores.