You know how important your credit score is. Your credit score determines your financial fate when it comes to a number of opportunities, from interest rates to insurance premiums to whether or not you need a deposit when you order cable TV. However, your credit score doesn’t exist in a vacuum. It’s based on something — the information in your credit report.
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The information in your credit report forms the basis for your credit score. What’s in your credit report is basically converted into numeric form. Just by looking at your credit score, someone can get an idea of what sort of story your credit report might tell. That’s why it’s so important that your credit report be accurate.
Before you apply for a loan — especially an auto loan or a mortgage — you should make sure that the information in your credit report is accurate. When my husband and I applied for our mortgage, we discovered that the credit report had a loan listed twice; it looked as though we had more debt than we actually did. The loan officer recognized the error, and we weren’t penalized for it, but it did lower our credit score slightly until the issue was rectified.
You can check your credit report by contacting one of the three major credit bureaus. You are entitled to one free report from each of the major credit bureaus (Experian, Equifax, TransUnion) each year. Go to Annualcreditreport.com to get your free reports. Also, when you are denied a loan, you are entitled to see a copy of the report on which the decision was made.
Whether you get your report for free, or end up having to pay for it, go through and check your report for inaccuracies. Make a note of them, and then prepare to dispute them. If there is inaccurate information in your credit report, bureaus are required, by law, to fix it.
You have the right to dispute items on your credit report. The credit bureau then has to investigate. Note that if the information is negative, but correct, the credit bureau doesn’t have to change it. Only proved mistakes have to be changed. Here’s how to go about disputing your credit report:
Note that fixing a mistake on one report won’t mean that it’s fixed on another report. As a result, you will need to check each report from each of the agencies, and dispute inaccurate items separately.
|700 - 750||Good|
|640 - 700||Average|
|580 - 640||Poor|