Reviewing your credit report is crucial to maintaining a healthy financial profile. Errors in your report can lower your credit scores, affect your ability to secure loans or credit cards and increase the interest rates you pay.
The Consumer Financial Protection Bureau reports that incorrect credit report information was the top complaint from 2021 to 2023. Therefore, identifying and correcting these errors is essential to maintaining or improving your creditworthiness.
How do you look for mistakes?
When checking your credit report, be vigilant for errors that may affect your credit score. Here are three common types of mistakes to look out for:
- Identity errors:
- Incorrect personal information such as wrong name, phone number or address
- Accounts belonging to someone else with a similar name
- Accounts resulting from identity theft
- Incorrect reporting of account status:
- Closed accounts reported as open
- Being listed as the account owner when you’re only an authorized user
- Accounts incorrectly reported as late or delinquent
- Data management mistakes:
- Incorrect current balance on accounts
- Incorrect credit limits listed
By identifying these errors, you can take steps to dispute them and improve your credit score.
How to decide when to dispute an error
Not every mistake on your credit report needs to be corrected. Focus on errors that could significantly impact your credit score or suggest identity theft. Here are examples of mistakes that should be corrected:
- Wrong account status, such as on-time payments reported as late
- Negative information older than seven years
- Accounts or loans you don’t recognize
- Incorrect credit limits or loan balances
- Addresses you’ve never lived at
Consumers can dispute these errors by contacting the credit reporting agencies and the data furnishers. To strengthen your case, you can gather supporting documents, such as bank statements or identity verification.
While you can handle many of these disputes on your own, working with an experienced consumer rights attorney can be beneficial when inaccurate reporting or identity theft affects your credit score. A skilled lawyer can safeguard your rights and help you restore your credit.