The Federal Trade Commission this week released its latest findings in a ten-year study on the accuracy of credit reports. This report is another reminder of how important it is to review your credit report for inaccuracies.
What does this mean to you?
You can check your three credit reports for free once every 12 months at annualcreditreport.com. Dispute any errors, and contact the company that reported the incorrect information to correct it.
For example, if your credit report says that you are 30 days behind on a payment to Bank ZYX, but you’re not actually behind, dispute the error with the credit bureau and also by contacting Bank ZYX directly.
If that doesn’t work, file a complaint with us. You’ll get a confirmation number immediately, email updates along the way, and be able to check the progress online.
What’s in a credit score?
The information in your credit report is used to make a credit score, which translates this great mass of information into a single number that essentially indicates the expected likelihood of repaying a loan on time. Generally, the lower the score, the lower the likelihood you’ll repay a loan on time, compared to other consumers.
How are credit reports used?
Credit reports are used in a wide range of situations – including decisions about whether you can rent a home, and in some states, how much you pay for auto and homeowners’ insurance. Sometimes they’re even used in hiring decisions. Banks, landlords, cell phone providers, and many kinds of other companies rely on the accuracy of this information to make decisions.
What happens if there’s a mistake on my credit report?
A mistake in your credit report can cost you because it can stop you from getting the best rate you’re eligible for any time you borrow money. If there are mistakes on your credit report that make you look bad, then you could be paying more than you should be every month.
Do you have more questions about credit reports and scores or other financial questions? Ask CFPB.