Have you taken a good look at your credit report recently? If you haven’t, you should…even if you know your overall score and are okay with it. There’s a lot that goes into credit score reporting, such as how many accounts you have, which lenders the accounts are through, what the balances are, how old your lines of credit are, and other personal details such as name, addresses, if you’re a co-signer on an account, etc. It is a tried and true way for companies to take a quick look to see how much credit you have, how frequently you’ve applied for it, and how well you pay it back. That’s the meat of a credit score. Unfortunately, some studies show that up to a quarter of credit reports contain errors. Some may be harmless, but some may be seriously damaging your credit, and could also alert you that someone else may have access to your credit that you don’t know about. It’s a good idea to make a monthly habit of checking your credit reports, particularly if you’re in the market to buy a house.
Three Common Credit Report Errors
- Inaccurate Account Information
- Incorrect Personal Information
- Fraudulent Accounts
Inaccurate account information is the biggest error, and it’s easy to see why – all that needs to happen is someone put a decimal in a wrong place, and it suddenly looks like you owe a lot more than you actually do. Sometimes a bank or credit reporting agency forgets to mark something as paid, or even as paid off. Credit reports can show late payments when the payments were on time. The good news is, you do have recourse and you can petition to correct the errors – typically not hard to do by providing a check stub or similar. If you are in the right, the credit agency must erase the error by law.
Incorrect personal information is the second most common error – mistakes in spellings of names, wrong middle initials, etc. It seems like it is not a big deal, but it really is, because when it comes time to get a mortgage loan, if the names don’t match the report exactly, they may not give you the loan. Pay special attention to the addresses that come through on your credit report – if a wrong address shows, there is a high probability that someone else’s credit data is incorrectly on your report.
Perhaps the best reason to monitor your credit score is to monitor for fraudulent accounts. Sadly, it’s not that hard for computer hackers to acquire personal information or bank information, and you may suddenly notice a credit card in your name that has been charged to the max – and you’ve never even applied for it. There are many protections for consumers in place when this happens, but the sooner you can get it off your credit report, the better, and it’s also more likely the person responsible can be caught.
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