6 Common Errors Likely To Appear On Your Credit Report
A credit report includes your credit information from various banks and financial organizations aggregated by credit bureaus. The report includes your loan and credit card repayments, outstanding balances, and account usage. Your credit report is the basis for calculating the credit score. Banks rely on the credit score and report to evaluate the capacity and intent of your loan application. So, your credit report information should be updated and accurate.
Here’s the catch
There’s a chance of the details on your credit report having some errors. Additionally, there’s a likelihood of the bank missing to update the information regarding your loan account with the credit bureaus. The bank might report the data appropriately but the credit company might miss updating the credit report. All these errors potentially lower your credit score. This makes getting new credit lines hard. Fixing these errors costs money to hire a credit repair company and forces postponement of aspirations.
Common errors that might appear on your credit report
Closed accounts still open
An account is closed after paying all loans and credit card dues and it doesn’t have future activity. Noticing an open account indicates having to pay back some money or availability of credit lines to use. The presence of old lines that weren’t closed in the credit report portrays having higher lines and available credit available to you. This impacts your credit score and eligibility for the loan. Open closed accounts on your credit report need reporting with the documented proof for rectification as soon as possible.
An account that doesn’t belong to you
After getting your credit report, there’s a possibility of discovering credit accounts under your name that you aren’t aware of. Contact a reputable credit repair agency to help fix the issue. The agency will understand the best way to repair credit quickly. This error might result from wrong reporting from the bank or credit bureau. The credit repair company will immediately take up the matter with the credit bureau or bank to have it resolved.
Out-dated accounts
The credit report includes the last reported date for all accounts. Closed accounts should have a similar or closer closure date. Open accounts should have the last reported date within 30 to 60 days. Ensure that all account records are up-to-date. The best thing to do is to contact the concerned credit bureau or bank to fix the issue. Having out-of-date records portrays a wrong impression to creditors and might impact your credit score.
Delinquent accounts
Accounts past their due payment dates for the last three years for each credit line are portrayed as delinquent. Delinquency is reported for credit card accounts on failure to pay the minimum amount due. Your lenders might give you a grace period before reporting delinquency. Afterward, missing to make repayments for more than three months automatically portrays your account as a non-performing loan or asset.
This account significantly drops your credit score making it hard for lenders to trust you. Delinquent accounts for more than 30 days need careful review. If you made repayment, inform your bank and credit bureau to eliminate the error.
Debt recorded multiple times
Your credit score includes about 30 percent of debts you took creating a significant impact on your credit history. Having too many debts to your name makes it harder for financial institutions to give you credit. However, look out for loan accounts or credit cards reported multiple times.
These give a wrong impression and lower your chances of accessing credit. The presence of two credit lines means one is reflected with good credit history while the other is delinquent. Check your credit report always when taking a loan to avoid such errors.
Identity errors on your credit report
There is also a likelihood of identity errors on your credit that impact your credit score. Wrong information might result from customer mix-up in the bank or credit bureau. It might lead to the presence of loan or credit card information for another person reported against your name. The mixed-up details might include phone numbers, names, addresses, or PAN. The mismatch might happen if you had a name change in the PAN account or adjusted arrangement of your name for some accounts.
Identity fraud might also cause errors on your credit report. This serious concern happens when someone opens accounts in your name using your personal information. Look out for suspected identity fraud on your credit report and alert your bank or credit agency. After verification, the fraud needs reporting to local police to apprehend the culprit.
Bottom line
Lenders check your credit history to determine whether to approve your loan application or not. However, there is a possibility of errors in the credit report that might affect your credit score. Enlist the services of a professional agency to check for potential errors and contact appropriate parties to have them fixed. This allows improving your credit score to increase the chances of loan application success.