To find out if you have mistakes on your credit reports, you’ve got to do some digging into them. Luckily, there are ways to remove errors from your credit reports and repair your credit score.
Finding a mistake on your credit reports isn’t uncommon. A 2012 study from the Federal Trade Commission states that about 26% of their 1,001 participants found a potential error in their reports. This means you’ve got about a one-in-four chance of finding a mistake on your reports, and the wrong kind of error could make you appear a risky borrower to a lender.
Your credit reports are largely used to determine whether or not you can get approved for new credit, and they influence what kind of deals you qualify for. If you’re a bad credit borrower, it’s important to thoroughly look through your reports, identify mistakes, and then work to remove them, so your credit reports reflect your creditworthiness correctly.
Common errors often include:
- Clerical errors
- Accounts reported more than once
- Older debts not removed
- Account closed incorrectly
- Identity theft
Make sure everything on your reports is listed correctly, including your past employment history, your past addresses, your full name, and your Social Security number. One mistake on any of those could lead to clerical errors, which could lead to a mistake that lowers your credit score.
Also, be sure that you don’t have credit cards or loans being reported that you’ve never taken out, and that the balances on your credit are being reported correctly.
What’s on Your Credit Reports?
If you’re not sure what’s on your credit reports, it's time to find out! Checking your credit yourself doesn't damage your credit score, and you’re entitled to a free copy of your credit reports once a week until April 2021 (due to the coronavirus). After April 2021, it reverts back to a free copy from each bureau every 12 months.
Now is definitely the time to comb through your credit reports for errors! Since you can check your credit reports in nearly live time, you're better able to work to remove any mistakes that may be bringing your credit score down.
To request a free copy of your credit reports, you can visit www.annualcreditreport.com, fill out some basic information, and wait for your reports. You also have three separate credit reports, one from each of the major credit reporting bureaus: TransUnion, Equifax, and Experian. Each is likely to contain different information, so it’s important to look through all three and check for consistency.
Found a Mistake on Your Reports?
If you find some questionable things while diligently looking through your credit reports, you can work to remove them. This is part of credit repair, and it’s done by filing a dispute. Once you file a dispute, the credit reporting agency has 30 days to look into it from the day you submit it.
You can file a dispute by mail, but you can also try to dispute accounts online since all three credit reporting agencies allow for online submissions.
However, you can’t simply just say that something is wrong and have the credit bureaus remove the error automatically. You may be asked to send proof along with the dispute that the reported account is incorrect.
For example, say you have an electric bill on your Experian credit report that says it's outstanding for missing payments, but you’ve already paid it. If you saved the receipt proving that you settled that account, send a copy of it (don’t send the original) to Experian along with the dispute.
Keep in mind that if you dispute an account and don’t have any proof, or don’t send proof that the error is actually an error, they can disregard the dispute and continue reporting the account.
What About Credit Repair Companies?
Credit repair companies can work to dispute mistakes on your credit reports for you. These companies are useful for borrowers with multiple errors on their reports, or mistakes that are complicated and hard to fix alone.
These companies can contact debt collection agencies, your creditors, or lenders for you to handle the errors on your credit reports. This is helpful for borrowers who work during regular business hours and can’t contact them, or those that simply don’t have the time to sit on the phone with creditors.
However, you’re going to have to pay for this service. Most credit repair companies are paid monthly, some coming with a start-up fee. You also need to provide the credit repair company proof that the mistakes on your credit reports are incorrect to help them move the credit repair process along.
If your reports are peppered with errors or duplicates that you need help disputing, and you don’t know where to begin, check out our trusted partner here.
Repairing Your Credit Is Worth It
While removing mistakes from your credit reports can take time and some effort, it’s well worth it. The information on your credit reports is used to generate your credit scores, so one error can stand to lower it.
Even if an account is a mistake, negative marks on your credit reports can remain on there for up to seven years. Errors that have to do with payment history can be especially harmful, since your payment history makes up the biggest chunk of your credit score (35%).
Taking On New Credit
Your low credit score can mean getting turned down for new credit, like an auto loan. Your credit score largely determines what your interest rate is on most loan types, so it’s worth it to keep up on the health of your credit reports.
However, if you need a vehicle right now and you can’t wait until your credit reports have recovered from mistakes, there are resources for bad credit borrowers in need of a car loan.
There are dealerships with special finance departments that work specifically with credit-challenged borrowers. The lenders that are signed up with these departments are called subprime lenders, and they understand that there’s more to a borrower than what’s on their credit reports. And here at Auto Credit Express, we know which dealers work with subprime lenders.
To get matched to a dealership with poor credit lending options, fill out our free auto loan request form. There’s no obligation to buy anything, and we’ll get right to work looking for a dealer in your area.