If you’ve ever waltzed into a car dealership expecting to buy a new or used car that same day, and experienced the feeling of wanting to crawl under that nice cozy chair they provided you after hearing your credit is not up to snuff, then 1) you’re not alone, and 2) you won’t fit, so don’t even try it. There are numerous ways that inaccurate credit reporting can sabotage your purchasing dreams, whether it’s a car, house, or even when applying for a new job! Know what errors can crop up on your credit report, check your credit report regularly, and know how to correct any errors you do find. Never be victim of a sneak-attack credit error ever again!
You Mean, Sometimes They Get It Wrong?
Oh yes. We all fear our dark credit histories. But here’s the thing: You could have a credit skeleton that most certainly does not belong in YOUR closet! Identity theft is consistently on the rise, but that’s not the only evil you have to watch out for. Human error is the very devil. The slightest errors on a hand written application form, inaccurate entry of social security numbers, debits or payments entered to wrong accounts, name-change confusion…they can all wreak terrible havoc on your credit history. Credit reporting agencies can also inadvertently duplicate the same account on your credit report. If the account in question was delinquent in any way or at any time, that mark will count against you twice on your credit report. You also need to make certain that any bad debts you had that are older than 7 years (barring bankruptcy-that shows up for10 years) do NOT show up on your credit report. Lastly, make sure debts you know you have paid in full are listed as such, and that accounts you closed completely do as well.
Check Yourself, Before…Yeah.
Information is power, right? So empower yourself! Check your credit report often. Set a date on your phone’s calendar if you have to! Don’t be surprised on car-buying day ever again. But be forewarned; also don’t let yourself be surprised with unnecessary fees for reviewing your credit report. Under the Fair Credit Reporting Act, the three national credit reporting agencies-Experian, Equifax, and Trans-Union, are required to provide consumers with a free copy of their credit reports every year (12 month period). Visit annualcreditreport.com to do so. If you visit other sites, there’s a high likelihood of hidden fees. Review the information provided carefully and find out how to dispute errors you may see (we’ll get to that). And just a clever tip-EACH company is required to give you the free report per 12 month period. Sure, you can request all 3 at once and compare, but you can also request from each company individually throughout the year. This allows you to more closely monitor your credit history, and any fraudulent or erroneous information contained in the reports.
Cue the Siren! Be Your Own Credit History Police
Now that you’ve got your credit report in hand, what do you do? Well for starters, review it carefully, and look for all of the red flags mentioned above. Are all of the accounts listed yours? Are accounts you closed listed as completely closed? Is there delinquent history listed that is beyond 7 years old (10 for bankruptcy action)? If you find errors on your credit report, you need to act quickly to correct them.
Be aware, if you had a delinquent account that was resold to a debt collection agency, this account may appear as a duplicate, but it’s really not and there’s nothing you can do, provided the history is within 7 years. (However-any debt collection company that no longer holds your debt SHOULD be removed) With all other errors that you definitely feel are legitimate, there is a process you must follow:
- Gather documents that support your claim that an error exists
- Compose a dispute letter that includes all pertinent information such as your contact information-including name, address, phone number, recipient, etc. Make sure the letter thoroughly details the disputed error/s and includes a COPY of your credit report with the error or errors highlighted in some way. Then send your letter to the agency or agencies necessary and make sure to request a response in an appropriate amount of time
- MAKE A COPY of your letter for your records, and send via certified mail
- Credit reporting agencies are required by law to give you a response within 30 days
- Given that last point, you have the option to take legal action if you hear nothing within 30 days, and can probably recoup losses by hiring an attorney
- Given ALL of the points above, keep COPIES of all correspondence with any agency, lender, or attorney in all proceedings
Don’t let inaccurate credit reporting ruin your credit. Why not be proactive and walk into an established car dealership knowing your credit history is accurate and secure? Don’t ever be attacked by your own credit; know your credit standing inside and out! Knowing your credit history, and knowing that the information contained in your credit reports is accurate can not only secure that home or auto loan you so desperately want, but can also save you the embarrassment of trying to fit under that chair.