The Lowdown on Data Accuracy in Your Credit Report
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People sometimes shy away from reviewing their credit reports because they’ve heard they are complex and hard to understand. But credit reports are far easier to read than you might think, and reviewing your credit report is a vital part of your financial health! Here are a few reasons you should review your credit report regularly, as well as some important information about credit report accuracy and disputing information you believe is inaccurate.
Why You Should Check Your Credit Report
Four out of five Americans don’t review their credit report. If you haven’t taken a look at your report recently, here are seven reasons to check it today:
It Protects You From Identity Theft – Your credit report is often the first indicator of identity theft. Spot any names, Social Security numbers, or accounts that aren’t yours? If so, someone might have stolen your identity.
It Can Help You Determine Your Creditworthiness – Are you planning on making a big purchase that will require a loan? A review of your credit report will help you identify any issues that might keep you from getting credit. For a nominal fee you can purchase a credit score that will help you better understand where you stand in the range of credit risk and what factors from your credit report are most affecting the number.
It Affects Your Ability to Rent – Landlords will run a credit check to determine if you will be a responsible tenant. A strong credit history will help ensure your application is approved and that you’ll pay a lower security deposit.
It Affects Your Job Prospects – Potential employers may look at your credit report (but, not your score) to determine how responsible you are, what kind of decisions you make with your money, and how prompt you are when it comes to making payments.
It Won’t Hurt Your Scores – Getting your credit report for your personal use won’t negatively impact credit scores. When you request your report, it is identified as a “soft inquiry” and only shows up on your personal credit report.
Beneficial to Your Overall Financial Health – It is just as important to your financial health to check your credit report as it is to check your bank statements.
Enables You to Identify Inaccuracies – The only way you are going to know if there is inaccurate information on your credit report is if you review your report!
How You Can Keep Your Credit Report Accurate
Be Consistent – It is vital for you to provide correct and consistent information on your credit applications. This lowers the chances of incorrect information being associated with your account by the credit grantor and credit reporting agencies
Get your Report Annually – Take advantage of your ability to get one free report from each of the national credit reporting companies every 12 months. To check your report regularly, get one free report from one of the credit bureaus every four months.
If you’ve already received your free reports for the year, you can request additional free reports if you’ve had a lender decline an application, are unemployed and seeking employment, receive welfare assistance, live in a state that allows more than one free credit report each year, or believe you are the victim of identity theft or fraud. If none of those scenarios apply to you, you can get additional reports for a nominal fee of $11.50.
The good news? You are unlikely to find an inaccuracy in your report that would affect your credit scores. Only one half of one percent of inaccuracies reported resulted in a change in credit score. This is because most inaccuracies are clerical errors in your contact information, for example a typo in your name or address, or a transposed digit in your Social Security number.
In spite of the low occurrence of inaccuracies, it is still important to check your report to be vigilant against errors, identity theft, and fraud.
How Do You Dispute Inaccuracies?
What happens if you find an inaccuracy on your credit report? Don’t be intimidated! The dispute process is straightforward and tends to yield positive results. 95% of consumers who dispute an inaccuracy on their report are pleased with the outcome of their dispute.
If you find an error on your credit report, you have the right to file a dispute. In 72% of cases, disputes are resolved within 14 days.
Disputing your credit report is simple and can be done in three easy steps:
- Get your Credit Report: You must have a copy of your personal credit report, for example your free annual report, to submit a dispute.
- Follow the Dispute Instructions: Your personal credit report will have instructions on how to dispute inaccuracies by mail, online, or by telephone. It will also include a personal credit report number you may need to provide. When submitting your dispute, remember to be very specific about what you are disputing. For example, “the payment was never late,” or “the account is the result of fraud.”
- Wait 30-45 Days: While most disputes are resolved quickly, allow 30-45 days for your dispute to be completed and any necessary documentation to be mailed.
Still have questions about credit reports? Submit your question to Ask Experian, a consumer education blog where experts answer your questions about credit. Sample topics this blog has covered include how to prevent ID theft and how fraud alerts work. Additionally, Experian runs LiveCreditSmart.com, a site dedicated to consumer credit education, and you can join them every Wednesday in their #CreditChat on Twitter at 3 p.m. (EST).
Another great resource is the Consumer Financial Protection Bureau (CFPB). CFPB allows people to “Ask CFPB” questions related to credit reports and scores. Questions currently listed include “How do I get and keep a good credit score?” and “How does bankruptcy affect my credit score?”
Have you ever had to dispute an inaccuracy on your credit report? What questions do you have about credit report inaccuracies and disputes? Share your experiences and questions in the comment section!
This post was made possible by support from Experian.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.