Everyone makes mistakes, but some may be more costly than others. One area that can be drastically affected is your credit report. This document contains all of your credit activity, and even one small mistake can knock your credit score down considerably. Lenders will take a look at your report in order to gauge whether you are trustworthy in paying back a loan. Mistakes on your report can lead to improper information and they won't feel comfortable giving you a major loan. So when accessing your credit report, make sure you scan it up and down for any mistakes. Here are some of the most common mistakes that can be present on credit reports:
Each of the three major credit bureaus – Equifax, Experian and TransUnion – has its own database of consumer information. This data will include your account and personal credit information. These areas will be present on your credit report, but from time to time the reports may have wrong information.
Sometimes a credit bureau can have wrong information about your personal identity. They can be as small as a misplaced digit in an address or as major as getting your Social Security number confused with someone else's. No matter how miniscule the error can be, it is important to know that it can negatively affect your credit score and other areas of your finances.
In some instances, your lender, bank or credit card company could have incorrectly sent the wrong information to the credit bureaus. But in other instances, the bureaus might have processed the data incorrectly. This can lead to your credit card having the wrong limit or your mortgage having an incorrect interest rate. This could not only influence your credit score, but it can alter your finances as a whole. Take a look at your report and make sure that all account information is correct. From making sure the comma is in the right place on a balance to your interest rate being correct, down to the last decimal point, double-checking work is important.
One of the harshest errors that can be present on your credit report is a fraudulent account. Seeing an unfamiliar account can mean that the credit bureau made a mistake or you have been the victim of identity theft. This can hurt your finances and credit rating because a thief may have access to your account information and your Social Security number.
If you spot an unfamiliar credit account, contact your credit provider immediately. You may even want to go as far as enacting a security freeze, which will stop anyone from trying to open a new line of credit under your name.
If you discover any type of error, contact your credit company and the bureau that issued you the report. Be sure to check the other two reports to ensure the information is correct on all three reports.