Imagine being turned down for a loan or paying higher interest rates because of errors in your credit report.
It happens more often than you think, and the negative consequences don’t stop there.
Checking the accuracy of your credit report is easy to do with these steps from Consumer Reports.
Back when he was in college, Nestor Vargas got a surprise trying to buy a car.
“I went to go apply for a loan, a car loan, and I was denied because they found an unpaid bill,” said Vargas, a certified financial planner at GreenMountainPlanning.com.
But Nestor knew that he never missed a payment.
“I was shocked, I went to the credit report bureaus, and I put in a claim knowing that it was inaccurate,” Vargas said.
Credit report errors are the top consumer issue filed to the Consumer Financial Protection Bureau. – And the problem is getting worse, with complaints more than doubling in just two years.
Common errors include inaccurate personal information, duplicate accounts, closed accounts reported as open and paid-off debt appearing as unpaid.
“A credit report is like an x-ray into a person’s finances! And having incorrect information on that report can stop a person from getting credit or a loan, renting an apartment, getting a good rate on your insurance, or even getting a job,” said Lisa Gill, an investigative reporter with Consumer Reports.
You can get your credit report for free, every week, from each of the major bureaus at AnnualCreditReport.com.
If you do end up finding an error, fix it right away.
“You’ll want to file a dispute with each of the three credit bureaus -, Equifax, Experian, and TransUnion. Include all the evidence you have, like account statements and payment records. Create a paper trail by writing a detailed letter of explanation, and send all of these via certified mail and keep copies for yourself,” said Gill.
Nestor, now a financial planner, reminds you to check your credit report often!
“Put it on your phone to remind yourself just like you go for a checkup to your doctor, you have to check your credit,” said Vargas.