The concept of how a credit score works is fairly simple: the higher your score, the lower the amount of interest you’ll pay on your loans. But what’s not so simple is when errors on your report get in the way of your good credit. In a recent study of the U.S. credit reporting industry, the FTC concluded that 5% of consumers had errors on one of their three major credit reports. This article from U.S. News offers some advice on how to check for errors, and get them corrected, to ensure that you’re not paying more for a mortgage or other loans.
There’s no magic wand to wave or button you can press. You have to contact each of the major credit bureaus, and that takes time, patience and a little know-how. Usually it isn’t a difficult process, but it will help you to keep the following in mind.
If you aren’t checking your credit reports occasionally, you won’t know there’s incorrect information on them. You can get one free credit report a year from each major credit bureau – TransUnion, Experian and Equifax – and if you stagger your requests, so that you receive one report every few months, that’s an effective way to continually monitor your credit throughout the year.
If the error is a small one, say a $30 debt that you’re positive you never owed, and it’s several years old, you may well decide that it’s better to just fix the problem through the credit bureau’s online dispute form (you’ll have to go to all three sites and fill out three forms).
But if you have a major problem, many experts advise you go old school and send your gripes in writing to each credit bureau.
It’s easy to wonder whether it really matters that you have a few erroneous items on your credit report. But if the error really is legitimate, odds are, you will get the credit bureau to agree to take the item off your report.
