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How to check for credit report errors

New Years Financial Resolution Series

How to dispute credit report errors

FINANCIAL RESOLUTION #4: CREDIT REPORTS

All credit report errors are not created equal. So when you are considering financial resolutions for the new year, don’t forget about your credit report. Keeping your financial goals on track includes reviewing your credit report once a year. It is also important to understand the impact of your financial habits on your overall credit health. But keep in mind credit agencies are run by real people, and human errors can be made. There are things you can do to ensure your credit score is accurate.

 

TRACKING YOUR CREDIT

  • Credit Scoring – VantageScore and FICO are the two credit scoring methods used by lenders. They use different algorithms, meaning that one may return a higher score than the other. But is that the only difference?
    • VantageScore – ranks payment history, age of credit file, and how high your credit limits are first, then considers total debt, and finally, available credit. VantageScore is free, through one of the free credit report apps, like the ones listed above.
    • FICO score – ranks payment history, total debt, then age of credit file, and finally, the account types on your report. FICO scores are paid for, but if you are denied credit, or are offered a higher rate based on your credit, the lender is required to give you your score.

 

  • Credit Reporting Services
    • Credit Karma –uses VantageScore and offers up-to-date credit scores and will notify you of any unexpected changes to your credit file. Only shows TransUnion and Equifax. Free.
    • Credit Sesame – uses the VantageScore and offer up-to-date information and a “report card” that helps you understand your credit. Suggestions on the best credit products for your score. Free.
    • com – offers a free credit report from the three big credit reporting agencies.
    • Credit Reporting agencies – Transunion, Experian, and Equifax will all provide a free credit report from their website each year.
    • com – subscription credit reporting service. They offer three tiers, ranging from $9.95 to $29.95 per month. It offers credit scores, scores from mortgages and other loans, and updates range from monthly to quarterly.

 

  • Credit Reporting Errors – credit reports are only as accurate as the information reported to them. Many of the mistakes are accidental, but not all of them. The most common errors found are:
  • Reporting issues – a creditor re-adds or reports wrong information
  • Identity issues – a consumer with a similar name whose credit file is mixed up with yours
  • Balance issues – incorrectly reported balances.

 

DISPUTING ERRORS

If you are using a credit reporting service, all of them typically have a place to dispute an account. Disputing the account this way fills in the necessary information. However, you can also write down the information and go straight to the agency that is incorrectly reporting on your credit file. If you are unable to do it online, each agency has a mailing address you can send your disputes to.

Reviewing your credit report is a good financial goal to maintain each year. It’s not as exciting as a financial goal to buy a new car, but if your credit report is not accurate, that car could cost thousands more, or prevent you from purchasing it at all. Financial resolutions are the cornerstone to financial goals, and are only as successful as the person making them.

 

Greta Gunselman is a personal finance freelance writer. Proud owner of a BA in English, she spends her time talking about finance over on Twitter (@thisgirlswallet) and post-military life at lifeafterthemilitary.blog. If you’d like more information about Greta’s writing, please contact her through her website, thisgirlswallet.com

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