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Managing credit effectively is one of the most important aspects of personal finance. Smart consumers review their credit reports at least once a year and review not only that their accounts are in good standing, but also keep a lookout for any errors that might be in the report. Whether you’re viewing a report through Equifax, Trans-Union or Experian, it’s important to report any error you find, whether it’s as simple as a misspelled name or as worrisome as an unfamiliar account number. But simply finding an error does not guarantee that your credit score will rise. Here’s why:
- The error might not have impacted your score: There are a variety of factors that can impact your credit score. In fact, there’s no hard-and-fast rule when it comes to calculating your score. As a rule of thumb, if you keep your accounts in good standing, pay your bills on time, and maintain low-to-modest balances on your accounts, you should have a decent credit score. An error in your report might not impact these or other factors – for example: if your name is misspelled, your credit score won’t be impacted.
- Time might not be of the essence: If you find a serious error in your report, such as an incorrect account or even an incorrectly notated delinquent account, you should report the error. But the effect it will have on your score will take time. The credit bureaus take time to investigate your claim – and a notation saying as much will be reflected on your report – but changing your score is a factor that includes several dozen factors beyond one item. It can take a month or more to see your credit score change.
- Unfortunately, the credit bureaus aren’t in the business of repair: It might sound harsh, but it’s true. The credit bureaus maintain data, which is used to verify your overall credit worthiness. They aren’t in the business of fixing data – that’s why it’s your responsibility to monitor your credit. This is why many consumers choose to use credit-mending services that have established relationships with the credit bureaus. Sometimes it’s vitally important to have an ally on your side.
If you find an error in your credit report, be sure to follow these steps:
- Immediately check your reports from other bureaus – Equifax, Experian or TransUnion. See if the error exists on those accounts.
- Report the error in writing to any of the credit bureaus that have incorrect information about you on file.
- Report the error to the individual creditor listed on your credit report. For example, if the report says you have a credit account through Acme Credit, contact Acme directly and inform them of the problem. This will put two parties in action to fix the error.
- If you are currently applying for a mortgage or some other immediate form of credit, and the error is hurting your score, strongly consider obtaining services through a credit-mending company, which can work as a third-party in repairing your credit score.
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