Waiting on the phone anxiously to see if you’re going to be approved for that mortgage for your first home, you start to sweat when it takes forever for the mortgage specialist to let you know what he finds out. He starts talking in a monotone and without excitement, and you can’t help but read between the lines on his face.
You were denied.
How did this happen? You’ve never even been a day late on your bills! Regardless, your credit reports deems you unworthy of lending.
Mistakes Are Costly
The problem was you never thought to get a copy of your credit report because you trusted they were right, because you were told your score was 750 when you opened the credit card at Best Buy. So what happened?
It could be as simple as a data entry error. Someone could have entered the information of someone else as your social security number and their mishaps have now plummeted your 750 down to 612. It may not have been your fault, but that mistake has cost your chance to land a fabulous place you wanted to call home.
Taking Accuracy For Granted
Consumers tend to feel safe in the fact that there are responsible and reputable companies that are handling their information that there will be few mistakes. The reality is, 4 out of 5 credit reports contain mistakes, as reported by CBS in 2009. And these mistakes are costing people dearly.
Not only could your personal information be incorrect, your balance or your account information may be inaccurate too. Then, there is the horrifying reality that peoples identities may be stolen.
Leaving your report in the hands of the bureaus that report them can be a foolish mistake. But this mistake is correctable.
Get a Handle On Your Report
Take these steps to review your credit history for free yearly to keep an active eye on your credit.
- Order a free credit report from AnnualCreditReport.com.
- Get out your credit card statements and have them in front of you as you review.
- Verify that all of your personal information is correct, including name, date of birth, and social security numbers.
- Check for late payments and red flag accounts. Also check to make sure the length of time the accounts have been open is correct.
- Dispute any discrepancies.
Learn As Much As You Can
In particular, check these five items within each report.
Payment History – Are you payments made on time?
Amount Owed – Do you owe more than you make?
Length of Credit History – How long have you had credit?
New Credit – How much and what kinds of new credit do you have?
Types of Credit Used – Is your credit from retail stores, vehicle loans, mortgages, installment plans, etc.?
How To Dispute
If you find errors in your credit report, you’ll want to dispute the mistakes as quickly as possible.
The FTC recommends sending a certified letter with a return receipt requested to the reporting bureau and to the creditor if there are mistakes. Send your letters with the errors indicated along with your documented proof of the mistake. Keep copies of your letter and attachments for your own records, as well.
Errors found because of fraud or identity theft require a different response. The FTC recommends flagging your account for fraud by calling each reporting bureau (Equifax, Experion, and TransUnion). Then, order your reports. And, lastly, you’ll need to create an identity theft report.
Keeping close tabs on your credit report can save you dearly in headaches and hassles when you need your credit the most. Don’t be afraid to ask for a report. Your credit history is in your hands.
What stops you from reading your report once a year?