Credit report errors are all too common, and many times if they are small errors, you may just let it go, not know about it, or you may not know how to dispute the credit report error. In any case, one small credit report error could have serious consequences for your financial future.
Credit Report errors can have a serious effect on your credit score. Your credit score is a number created by credit reporting agencies that is put together based on the information found in your credit reports.
The most commonly used credit score is your FICO score. This score is used by lenders, banks, credit card companies etc. in order to determine the likelihood that you will repay your debt. It gives them an idea of how risky of an investment it would be to do business with you. FICO credit scores range from 300 – 850. The higher the score, the better; it shows that you are lower risk to lenders.
An error on your credit report can lower your credit score. A low credit score can be damaging and hurt you in many ways, including:
Each of these instances alone can cost you thousands and some potentially tens of thousands! Don’t throw your money away. Make sure that you check your credit reports for errors and get them fixed right away. Though credit scores are generally not free, you do have the right to request your score from credit reporting agencies. The three national credit bureaus, Experian, TransUnion, and Equifax, may each have a different credit score and credit report for you, since they all use their own databases, so it may be a good idea to request copies from all three. Under the FCRA you are entitled to request and obtain a free credit report from each credit reporting agency every 12 months.
Your FICO credit score takes into account your financial history based only on what shows up in your credit report. They use both positive and negative information to create your FICO score. According to the Fair Credit Reporting Act (FCRA), negative information can show on your credit report for up to 7 years, and a bankruptcy for 10 years.
Your score is based on five categories and percentages of each category show the importance of that category:
Knowing that your credit score is used by lenders, employers, banks, insurance companies, and rental companies, to determine what kind of risk you are, it is highly important that we get our credit reports anually and check for errors.
If you have credit report errors that you cannot get removed, it’s time to contact The Consumer Law Firm of Francis Mailman Soumilas, P.C..