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Blogging for Change Blogging For Change
by Jesse Campbell on February 19, 2013

Credit reporting errors are common

 

As many consumers know, one of the most influential factors in your ability to obtain credit and favorable interest rates on personal and secured loans is your credit score. Your credit score is determined primarily by your payment history (charting all missed or late payments within the last seven years), with additional emphasis placed on the amount of credit currently extended to you and the amount of debt already in your name (among a number of other factors).

Because your credit score is used by lenders and credit card companies to determine your “credit worthiness” having a low score could end up costing you a lot of money in the long run. This is because a low score is interpreted as a high risk, which lenders balance by charging higher interest rates. If you have a high credit score you’re considered to be less of a potential risk, which allows lenders to extend you more money at lower rates.

The problem is that the process of compiling the information that makes up your credit score isn’t foolproof. All three major reporting bureaus (TransUnion, Equifax and Experian) may report different information about a consumer and, according to a recent study conducted by the Federal Trade Commission (www.ftc.gov), errors are even more frequent than originally believed.

Most interestingly, the report found that five percent of all consumers had errors on their credit report that could cost them money on loans and insurance. Overall, one in five consumers were found to have some kind of error on at least one of their three credit reports.

Of the consumers who identified an error on their report and filed a dispute with the corresponding credit bureau, four out of five had their credit report modified or corrected. Slightly more than ten percent of the consumers who had their credit report modified saw their score change as a result.

These findings highlight the importance of monitoring your credit reports regularly. Errors often go undetected until a potential lender pulls your report – at which point you may be on the verge of losing out on a good rate or not having credit extended to you at all.

All consumers are entitled to a free copy of their credit report from each of the three reporting bureaus every year. Be sure to take advantage and review your reports regularly. If you do notice an error, send a written dispute to the reporting bureau immediately – it can take up to 60 days for the dispute to be reviewed and the error corrected.

For more information on how your score is calculatedhow to build good credit and how to correct reporting errors should they occur, be sure to check out our extensive financial education section. We also offer in-person workshops on this and many other topics in select areas.

Comment(s)

Alex says:
April 17, 2013
Website: brettalex2@hotmail.com

This article was awesome!! Thank you. Being fairly new to the credit repair arena I am constantly trying to gather as much information as possible to try and keep myself headed in the right general direction. Spending some time on this post has actually given me a lot of great points to think about. In my recent research I have also been able to find some pretty useful information related to this topic when I Googled the credit locker university. This was helpful as well. Thanks again!



heDULcNX says:
April 03, 2013

Try. You can get your report from all three major crdiet reporting agencies, which is very important trust me. They will offer to sell you extra options like updates on your reports. Don't take them. The thing I would suggest though is getting your FICO score (which in the state of CA is about $8 maybe a few bucks more in other states). The FICO score is very important because lenders use it to determine your crdiet-worthiness.



Larry Klein says:
April 01, 2013
Website: www.retirement-income.net

The typical advice to contact creditor bureaus does not work for millions and that is the problem. The credit bureaus simply report what the creditors tell them to report. When a consumer complains, the bureaus simply confirm the same incorrect information with the creditors. And millions of consumers get stuck at this point, having no leverage to get the creditors to fix errors. 60 Minutes showed how their reporter, Steve Croft, got nowhere using the typical, ineffective advice to write the credit bureaus. Here is a solution that works and how I got AMEX and Citicorp to change their errors after they refused. The leverage is with the creditors and using small claims court gets their attention every time and is very inexpensive:http://disputeyourcreditreport.us/ebook



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