If you haven’t requested a copy of your credit report, there are many reasons why you should. Studies show that a large amount of credit reports have errors. One-fourth of credit reports contain serious errors that could cause you to be denied credit.
What are some common errors?
- Misspelled names
- Wrong Social Security numbers
- Inaccurate birth dates
- Inaccurate information about a spouse
- Out-of-date address
- “Closed” accounts listed as “open”
- The same mortgage or loan listed twice
- Absence of major credit, loan, mortgage, or other accounts that could be used to demonstrate creditworthiness
How can these errors happen? Most mistakes can be pinned to creditors who provide inaccurate information to credit bureaus. Mistakes can happen when credit accounts change hands. Some errors are the result of thieves stealing your personal information and establishing fraudulent accounts in your name. Other mistakes are simply human error.
Why should you care? Lenders use your credit score to determine the interest rate on any loans; the more creditworthy you appear on paper, the lower the rate you pay. Errors may cause you to pay more. In some cases, you even could pay a higher premium for auto and homeowners insurance, because insurance companies have found that people with poor credit histories tend to file more claims. And many people are surprised to learn that a potential employer turned them down for a job because of negative information on their credit report.
How do I get a copy of my credit report? The Fair Credit Reporting Act requires each of the “big three” credit reporting agencies—Experian, Equifax, and TransUnion—to provide you with one free copy of your credit report, at your request, once every 12 months. Go to www.annualcreditreport.com to request your reports. There are also several apps offered that will give you access to information from your credit report on a more regular basis.
How much does a credit score cost? If you want your credit score, a three-digit assessment of your creditworthiness, you’ll pay approximately $15 per credit bureau or $30-$40 for scores from all three credit bureaus. However, some financial institutions offer estimates of your score for free. A common version of this is called a Vantage Credit Score and is an estimate of your actual credit score.
What should you look for to make sure there are zero errors? Check the basics first. Check variations in name, Social Security number, and address. Keep a lookout for any variations. Often, variations are simply the use of a nickname or a transposed address digit.
What if you find an error in your credit report? Write a letter to the credit bureau or file a dispute online. The credit reporting agency is obligated by law to contact the creditor who supplied the disputed information. The credit bureau will generally get you a response within 30 days. If you’re not satisfied with how the dispute is settled, you can ask to have a brief written explanation added to the bottom of your credit report. Make sure to keep copies of all exchanged information, even your dispute letters.
At Public Service Credit Union we now offer a tool called Credit Score by Savvy Money. It allows our members view their Vantage Credit Score, see their credit report details and dispute any errors through TransUnion. Credit Score by Savvy Money shows you everything you need to know about your credit score, even how to improve it. It can be found in the mobile app and online banking. Learn more about Credit Score by Savvy Money.