Most Common Credit Report Errors and How to Fix Them
Your credit report is probably the last thing you would like to read. But, you must. Because there is a good chance that some of the information in your credit report is wrong. The wrong information in your credit report can act as red flags, making the lenders think twice before lending you any money. However, the good news is that these red flags in your credit report, which are rightfully not yours can be fixed. This is a short guide on what is a credit report, how to check your credit report, what are the common credit report errors you need to look out for and what steps you should take to resolve them.
What is a credit report?
A credit report is a summary of your credit history that a credit reporting company prepares to determine your creditworthiness.
Your potential lenders use credit reports as one of the important factors in deciding whether to extend you credit – and at what terms.
Your credit report is a snapshot of everything you have done with your credit. Any wrong information or errors in your credit report can adversely affect your chances of getting any credit. Therefore it is important that you carefully check your credit report for errors. However, reading a credit report can get a little overwhelming because there is so much information in it. To make it easier for you, we have made this short guide on how to read your credit report.
How to check your credit reports
To be able to find and fix errors, you need to keep a close eye on your credit reports. In India, there are 4 credit bureaus that are licensed by the RBI to provide credit scores: CIBIL, CRIF High Mark, Experian, and Equifax. It’s important to keep an eye on all of them, as they may contain slightly different information.
You can request your credit report from each of these credit bureaus, at least once a year. All you have to do is create an account with the credit bureau, answer a few verification questions and you’ll get the credit report.
What are the common credit report errors you need to watch out for?
- Mistakes in your identity information, such as name, address, contact details, etc.
- Mixing your accounts with another person with the same or a similar name
- Open accounts reported as closed or vice versa
- You are reported as the owner of the account when you are just an authorized user
- Accounts that are reported as delinquent or late in spite of timely payments
- Incorrect date of date opened, date of last payment, or date of first delinquency
- Accounts listed with the incorrect current balance
- Accounts listed with an incorrect credit limit
- The same debt listed more than once, possibly under different names or creditors
- Fraudulent accounts or transactions
- Unknown accounts in your name
- Unknown transactions in your name
What to do when you find errors in your credit report?
- Notify the credit bureau of the mistake, either online or by phone. You can also write an email or a letter. The contact information of the credit bureau should be available in your credit report.
- Explain what the mistake is and why it’s an error. Back up your claim with information.
- Include your contact information, in case the credit bureau wants to get back to you.
- Also, reach out to your financial institution and request them to provide the correct information to the credit bureau.
- If the errors in your credit report make you believe that you are a victim of identity theft, request your credit bureau to place a fraud alert on your account. This will notify the lenders if anyone tries to misuse the account, making them take additional steps to tighten the security of the account.
- Once you intimate the errors to the credit bureau, your dispute will be investigated, and the necessary changes will be made post-investigation.
When it comes to the credit report, two things are very important to maintain your financial health: regularly checking your credit report and making efforts to improve your credit score.
Small errors in your credit report that may seem trivial to you can be a deciding factor the next time you apply for a loan. So, get them corrected as soon as possible.