Congratulations! You made it past Step One! The next Credit Repair Judo step is to find any inaccurate and wrong information on credit report. Errors on credit reports can cost you money, or even worse, keep you from getting a job or a place to live. Trust me, I know!
Errors and Wrong Information on Credit Report – More Common Than You Think
Before you start thinking this is an exercise in futility, you should know that errors on credit reports are not rare. In fact, a 2013 study done by the Federal Trade Commission (FTC), found that at least one in four consumers had wrong information on at least one of their three credit reports. That means that there is a 25% chance that you will find an error on your reports.
You might think “So what? They won’t change the information anyway.” Wrong.
That same FTC study found that four out of five consumers who filed disputes with the credit reporting agency saw some modification in their credit report.
That is a big deal!
Remember, your credit report is the information that the credit reporting companies use to generate your credit score. Your credit score determines whether you get a loan and how much it will cost you.
If your credit report contains wrong information, it needs to be corrected. Once negative, wrong information is corrected, your score should go up.
Here’s where some judo comes in handy. You think that the large credit reporting companies would blow you off if you sent a letter saying they had inaccurate information. However, by law, they are required to investigate when you point out an inaccuracy in your report. I will show you how to correct this information, but for now, lets get back to reviewing your reports.
Start Simple – Look for Inaccurate Personal Information
When you start to think about errors on your credit report, you may think only in terms of whether a company wrongfully reported you to the credit bureau. For our purposes, that is just the tip of the iceberg. You want to review all of your debts, but you also want to review all of your personal information.
Make sure they have your name listed right. Make sure that all of the addresses listed are actually yours. Check your social security number. Many times, information gets mixed up. Pay especially close attention if you have a common name. Also, pay attention if you were married and divorced. Many times they will put the personal information or addresses of your ex on your credit report.
Simple enough, but important. Obviously, wrong personal information can be harmful to your credit report. Even a wrong middle initial could indicate that the credit report companies have you confused with another person. If that person has bad credit, its now part of your credit score.
Dig Deeper – Check Accounts for Wrong Information on Credit Report
Next check all of the accounts listed. You want to make sure the dates are accurate, as well as the type of credit. Make sure it shows the correct open or closed status, or if it has been paid off. If a delinquent account has been paid off, make sure that is noted on your report.
Dates may not seem important, but they are. You want your good credit to be as old as possible. This is because the age of your accounts factors into your credit score. The longer your good credit history, the better.
Dates are also important with the negative accounts and marks on your credit report. Negative account history remains on your credit report for seven years. If you have negative information older than that, it needs to be corrected. Along these lines, if you have filed for bankruptcy in the past, it stays on your report for 10 years.
Pay special attention to the balances and limits. Make sure that the reports reflect the correct credit limits for each credit card. This is important because it affects your credit utilization. Credit utilization is an important component of your credit score. It is calculated for all of your accounts and for each individual card. You want to stay below 30% overall, so if your limits are not accurate, then your credit utilization percentage will be off.
Check for Identity Theft with Your Credit Report
Wrong information on your credit report can be the first indication of identity theft. Check and make sure your recognize all accounts listed. Toward the end of your report there will be a section on inquiries. Make sure you recognize all inquiries to your credit history. These could be warning signs of identity theft.
Another sign of identity theft are defaults or delinquencies on your report that you didn’t cause. Start a list and make a note of any suspicious entries on your report that may be related to identity theft. We will address those.
Check for Late Payments
Finally, you want to drill down on each credit account and make sure there are no late payments listed in error. Once you get your report, you will see that your payment history is listed for each account. Month by month, the report will show whether you paid on time. Each report is a little different, but the basic information is the same.
Go through month by month and check that you are given credit for paying on time. If not, make a note that includes the following:
- The Credit Reporting Agency
- The Account
- The Date of the Payment
Eventually, we are going to be gathering evidence to support our case, but for now, just keep track of the errors.
Next Step: How to Correct Wrong Information on Credit Report
As you go through each of your credit reports, don’t be surprised if you find errors. In the next step, I am going to show you how to start correcting those errors. I will show you a few different methods to do this.
For now, make sure that you have thoroughly noted all the errors you have found. Review those errors and check your records for documentation that shows the correct information.
And once again, congratulations are in order! At this point, you have tackled your credit reports and went over them for errors. For me, this was a major step. At this point, I was starting to realize that the bad credit monster in my closet wasn’t so scary after all.
There is a light at the end of the tunnel!
Has the process of reviewing your credit report been hard? Did you find any errors? Share your experience in the comments section below!