10 May Quick Guide to Auditing Your Credit Report
You might feel like you’re on your own when it comes to your credit, but that’s far from the truth. In reality, the government passed the Fair Credit Reporting Act to protect consumers just like you. This act states that all of the information on your credit report has to be accurate. That means that if you find something that isn’t accurate on your report, it has to be removed.
This is much more common than you think. It is reported that 42 million people have errors on their credit reports. Are you one of them? You can find out with an audit. Then, if you find errors, you can reach out to the credit bureau and ask that the item be taken off your report.
Pull All Three Reports
First things first. If you are serious about auditing your credit report, you need to pull a report from all three credit reporting bureaus. Each bureau uses propriety software for building reports. That means that one bureau might have something that the other bureaus don’t have. You need to check them all against each other to make sure they are all accurate.
You can get all three reports for free from AnnualCreditReport.com. The free reports are available one time each year.
Check Your Reports
When you analyze your reports, check for accounts that you did not open. If you find one of these accounts, one of two things has happened. Either you are a victim of identity fraud, or you were confused with someone else. Your name might be similar to the other person’s, so his or her account is on your report.
You also need to makes sure that your report doesn’t contain negative information that should no longer be there. Bankruptcies have to be removed after 10 years. Late payments, foreclosures, and collections have to be removed after seven years. If you have information on your report after the mandated removal date, it’s still hurting your credit and needs to be removed immediately.
You also want to make sure that your personal information is all listed correctly. Wrong addresses, misspelled names, and inaccurate employment information can all hurt you. It’s essential that your information is completely accurate. A misspelled name can cause a hold up if you are trying to obtain credit, and the wrong employment information can hurt you if you’re trying to get a job.
Next, make sure that all of the accounts have accurate information. Let’s say that you know that you owe money to Capital One, so the account is accurate. You also need to make sure that the right amount is listed. For instance, if you owe $1,000 but your credit report says you owe $2,000, that will hurt your score. Also, if the credit report says you have paid late in the past, but all of your payments have been on time, that will hurt your score. Check all of that information to make sure it’s 100 percent accurate.
Gather Your Evidence and Make a Case
After you audit your report, you need to gather evidence of the errors and submit everything to the credit bureaus in writing. Then, the bureaus will investigate your claims. They might ask you for additional evidence if required, but the burden of proof is actually on the creditor, not you.
If you put all of your trust in credit bureaus and creditors, you’re making a huge mistake. You need to look out for your best interests by auditing your credit reports. Then, you will know if all of the items are accurate. If they aren’t, you can do something about it.