How to correct balances on your credit report

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How to correct balances on your credit report
2 years ago
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One of the most frustrating challenges faced by consumers is making sure that their credit reports reflect their credit card and other loan balances accurately. When inaccuracies do take place many negative consequences can result, from lower credit scores to higher interest rates. Having inaccurate balances on your credit report can keep coming back to haunt you month after month, as potential creditors, lenders, insurance companies and employers continue to review that inaccurate information and base their lending, premium and hiring decisions upon it.

Why Do Errors Occur?
Balance errors can occur for a number of reasons, and it is important for consumers to understand how these erroneous balances keep showing up on their credit reports. Just consider some of the factors that may be at play when the balances reported on a credit report are in error.

- To err is human ??even in the age of computer processing there are still plenty of human beings in the credit reporting process ??and those human beings are fallible. Something as simple as a transposed number or mis-keyed entry could wreak havoc with your credit report, so it is important to review the balances listed on your credit report very carefully on a regular basis. If your $2500 credit card balance suddenly shows up as a $5200 balance you have good reason to suspect human error may be at work.

- In addition to mis-keyed numbers and transposed digits, human interaction can also lead to additional errors. In some cases creditors and credit bureaus will accidentally report the balance of another consumer as your own, causing problems for your credit report and your credit score. If you see a balance that you do not recognize it could be a sign that this type of error has occurred.

- Old data ??in other cases the balances your creditors report may be old ones ??or even balances that have since been paid off. If you recognize the balance but have since paid it off you may be seeing this common type of error.

- The problem of electronic data exchange ??even when information is exchanged electronically problems can still crop up. Credit card companies, banks and other financial institutions routinely exchange electronic data with the three major credit reporting agencies, and if the data being exchanged contain errors so will the credit reports of the affected consumers. If you have had a particular balance corrected ??only to see it show up wrong the next time you check your credit report, chances are good that your creditor is providing erroneous information to the people who calculate your credit score.

What Can Be Done?
Fortunately there are some steps consumers can take to remove these errors and make sure they stay gone for good. Resolving balance errors on your credit report is essential ??not just for your peace of mind but for your financial future as well. If you spot an erroneously reported balance on your credit report it is important to track it down and eradicate it as quickly as possible. If you do find problems with the balances listed on your credit report just follow this three step plan to deal with and resolve those errors.

1. Find out where the error is coming from. The first step should be to contact the creditor who is showing the incorrect balance. Take the time to explain the problem and ask the representative to check the balance.

2. If the balance is incorrect ask that it be corrected immediately. When dealing with an incorrect balance it is a good idea to follow up in writing, attaching a printout or copy of your most recent statement balance if possible. And of course it is important to follow up later to make sure that the balance has been corrected.

3. If your creditor lists the balance correctly the problem is most likely with the credit bureau itself. If this is the case it is important to contact the credit bureau in question and ask that the balance listed on your credit repot be corrected. Again it is a good idea to follow up in writing and ask for an investigation of the incorrect balance. Any supporting documentation you can provide, such as your most recent statement or proof that a balance has been paid off, can be extremely helpful.

Keeping track of your credit report is not always an easy process, but it is certainly an important one. By keeping a watchful eye on your balances you can head off problems before they start ??keeping your credit score high and your interest rates low.
2 years ago
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