Wednesday, April 30, 2008

Can You Spot a Mistake?

I'm not asking you to proofread, I'm talking about your credit report.

I know you're bombarded everyday about how important your credit score is. And you already a good score to will get you the best loan rates. But while there are oodles of websites that tell you how to correct errors on your credit report, do you know what to look for? What kind of errors could there be? Are errors common?

photo by David Wulff

Last things first: Errors seem to be common. A study by the federation of state Public Interest Research Groups (PIRGs) in 2004 concluded that 79% of the credit reports surveyed contained either serious errors or other mistakes of some kind. Although that was 4 years ago it still seems to be the case. Sad, but true.

First look for obvious errors like misspelling of your name, incorrect present or past addresses, or inaccurate employment information.

Next examine your report for any of the following:

  • Information that doesn't belong to you. This really happens. One wrong digit in a social security number is all it takes. So check every line to be sure it's yours.

  • Applications for credit that you didn't fill out. Could be fraud or another mistake in the SSN.

  • Delinquency that you've already remedied, or an old collection action that is still being reported as overdue. And speaking of bad debt that you thought you erased...

If you recently paid down your credit-card balance to zero but the credit bureau shows a 3-month-old balance, that’s not a disputable error, says Donald Girard, a spokesman for Experian, as long as the outdated balance was correct as of the reporting date.

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can stay on your report for 7 years. Bankruptcy stays for 10 years. Unpaid judgment against you can be reported for 7 years or until the statute of limitations runs out, whichever is longer.

There is no time limit on reporting information:

  • about criminal convictions;

  • reported in response to your application for a job that pays more than $75,000 a year;

  • reported because you’ve applied for more than $150,000 worth of credit or life insurance.

If you do find errors be sure to dispute them IN WRITING and DON'T EVER SEND ORIGINAL DOCUMENTS. Yes, I'm screaming. It's that important. Check out the for great, accurate information on how to dispute errors.

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