How to make sure your credit report is accurate

Errors appear on consumer credit reports regularly. Checking your credit at least once per year helps protect your credit.

Importance of Healthy Credit

Your credit report is a history of your credit activities. In fact, your credit report and credit score play a major role in many aspects of your life. A credit report incorporates a large amount of data and determines how creditworthy you are. For example, several items are factored into your credit:

  • Timeliness of payments
  • Debt balances
  • Credit history and length
  • Types of credit you have
  • Legal items (bankruptcy or judgment)
  • Number of inquiries into new debt

Home loan approval relies heavily on your credit report. As a result, annual credit report checks improve your ability to obtain a home loan in the future. After all, these checks allow you to proactively spot errors and correct them.

In fact, The federal Fair Credit Reporting Act (FCRA) requires credit reporting companies provide a free copy of your credit report once a year. You can learn more here –  opens in a new windowAnnual Credit Report.

Review all 3 Major Bureaus

The FCRA regulates both credit reporting agencies (CRA) and the creditors supplying the information to them. Protecting consumers by ensuring privacy and accuracy is the goal. In addition, the 3 major credit bureaus provide services aimed at protecting your credit. Check out each below:

Reporting Errors on Your Credit Report

Errors on your credit report might impact the cost of a mortgage, auto loan, insurance policy and many other items. In addition, these errors may even keep you from getting approved for new credit.

However, consumers have a right to review their files and contest errors.  In fact, each credit reporting agency must investigate, respond and correct the error when appropriate. Thankfully, reporting an error on your credit report is easy today.

If you discover an error on your credit report it is important to:

  • dispute the error in writing
  • provide specific information (name, address and social security #, each item of dispute along with request for deletion or correction, and copies of support documents proving the error)
  • keep a copy of each dispute letter and your supporting documents
  • use certified mail, return receipt requested
  • submit a dispute letter on each specific item to the creditor
  • if an error is verified, the creditor must notify each credit reporting agency (bureau) of the changes to be made to your credit report