Your credit, your life: Credit reporting errors happen

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Your credit, your life: Credit reporting errors happen
3 years ago
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Credit reporting is as much a part of daily life as brushing your teeth, yet many people are oblivious to the impact that errors and issues in their credit report can have on present and future plans. A pristine credit report with a high score from all three agencies is a worthy goal. Preventing negative reports should be the first order of the day for everyone. The three private reporting agencies - Experian, Equifax, and TransUnion - are accessible to anyone with a legitimate reason to need to check your credit status. That includes any store offering a credit card, any utility, a landlord, and, of course, the lender to whom you intend to turn for a mortgage or other personal loan.

There are errors that can impact on your credit score without your having done anything at all and completely without your knowledge unless you check your scores regularly. Remember that sandwiched between the creditor and the debtor in every case is a computer and a human hand, and both can make mistakes. A typo in your name, address, social security number, employer's name, address, employer's tax number, credit account number, date of birth, date of transaction...any of myriad points of input can trigger an alarm.

Accounts that you believe you closed but which remained open due to processing errors can weigh against you. Incorrect payment amounts and credit limits can be reported by the creditors. Your income is balanced against your outflow and against your credit limits on each of your accounts whether you use them or not, and an unhealthy balance is easy to achieve if there are open accounts dating back years. A payment sent but not credited may be a blotch on your record. If you attempted to co-sign a loan for someone else who failed to make the payments on-time, these missed payments will show up on your credit report and as a result will lower your credit score. Joint accounts that are in default because the other holder has stopped paying are yours for the weeping.

Fortunately, though it is not always easy, the errors can be corrected and your credit score restored. It is important to know that you are permitted one free credit report from the three agencies every 12 months. You can access it online at In addition, you are allowed to request a free report if you are under threat by a company or other creditor, if you are on welfare, or you know you have been the victim of fraud or identity theft. Otherwise, you will be charged for each report from each credit reporting agency.

Once you have the report in hand, check it thoroughly. If you find an error, be prepared to dispute it. This can become complicated depending on how much chaos the error created, but it can be done. The report has a form attached which you can use to begin the process. Once the dispute has been launched, be sure you have documentation to support your claim that the error was not simply a bad decision on your part but a legitimate mistake, yours or someone else's.

The take-away concepts here are three:

1. Keep good records of all financial transactions.

2. Check your credit reports annually or if you suspect fraud.

3. Exercise extreme caution when filling out forms online or in person to avoid simple errors that compound quickly into huge problems.

It is, in the end, your financial life. Only you can keep it humming under the umbrella of a good credit score.

by Joanne M. Friedman
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