Could something be lurking in your Credit Report?

When most people think about credit they think about their credit score which is an important measure of your credit risk.

Lenders use this score in order to determine the risk to them when they lend you money and use it to determine the terms of your loan etc.

Many people pay attention to their credit scores but rarely review their Credit Report. A credit report shows detailed information about your credit activity, loan paying history and the status of your credit accounts.

Lenders use these reports along with your credit score to determine if they want to lend you money and the terms of the loan.

As this report plays a significant role in whether or not you will be able to obtain credit it is very important that you review the information multiple times each year in order to make sure it is accurate.

So now you may be asking what should you be looking for when reviewing your report?

In the Personal Information Section you want to review the following:

1. Accuracy of your name, address, phone number, social security number and birth date.

2. Missing previous address if you have not lived at your current address for a long time

3. Outdated/missing employment information

4. Incorrect marital status - ex. Your divorced spouse is still listed as your current spouse.

In the Public Records Section you want to review the following:

1. Be on the look out for lawsuits you are not a part of or lawsuits/judgements etc. reported after the statute of limitations expired or 7 years after the judgement was filed.

2. Bankruptcies filed more than 10 years ago still being reported.

3. Tax liens paid or criminal records that are more than 7 years old.

4. Various other types of liens reported as unpaid such as mechanics liens.

In the Credit Accounts Section you want to review the following:

1. Credit histories being reported for someone with a similar name.

2. Accounts listed as joint when they are not or the reverse.

3. Accounts that you did not open which may indicate identity theft.

4. Account histories that are in error - ex. Payments marked as late when they were on time, incorrect debt balances, accounts that you are incorrectly listed as co-signer and closed accounts listed as open.

5. If a closed account is not marked as closed by consumer when it was then it may look like the lender closed the account.

6. Account delinquencies over 7 years old still being reported. Also incorrect dates listed for delinquencies.

7. Delinquent child support that is older than 7 years.

8. Other negative information listed that is older than 7 years.

In the Inquiries Section you want to review the following:

1. Look for inquiries where you did not give your permission as creditors must do so to obtain your report.

The list above is not an all inclusive list of items to look for but it is a good start to reviewing your credit reports.

If you find an error what can you do?

The first thing you should try is disputing the error with the credit agency that reported it. If the agency does not fix it you may want to hire an attorney to help if the error is seriously hurting your credit. If the error is not serious an attorney may not be worth the cost.

Another quick tip is to never pay for your credit report as you can get them for FREE!

Every year you can download your credit report for free 3 times (one from each credit reporting agency)(Experian, Equifax and TransUnion)

The website link below is the only official source authorized by federal law to give out your free credit reports. The website is Annual Credit Report .com - see link below:

https://www.annualcreditreport.com/index.action

Don’t use any service that charges money for your credit report since you can get it 3 times per year for free! I would also spread out the requests from each agency so you request one report every 4 months and review your report over time.

As you can see it is very important to consistently review your credit report for errors that could negatively impact your ability to obtain credit or indicate identity theft!

Also this article is meant to give you an idea of what to look for on your credit reports and does not include all possible scenarios.

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Disclaimer:

This article is for informational purposes only and should not be considered legal, accounting, financial or tax advice. Please consult your own advisor.

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