Before you apply for a mortgage or any loan, you should pull your credit report. In fact, you should pull it at least once a year. This gives you a chance to look it over and check for errors. Believe it or not, things are reported wrong on a credit report all of the time. If you don’t look at yours periodically, there could be issues you are not aware of that harm your ability to get credit.
Following are the steps to take to find the errors and have them corrected.
Pull Your Credit Report
Each credit bureau provides you with one free credit report each year. You can pull all three bureaus at one time each year or you can pull one every 4 months so that you cover the entire year. No matter what you decide, you’ll need to visit this website to request your free report.
Once you have the reports, look at everything being reported. Is everything accurate? Meaning, do all accounts belong to you? Is there a late payment reporting that you know wasn’t late? Did a creditor report an account closed by them, when you actually closed it?
These are things you must fix as they could negatively affect your credit score.
Fixing the Errors
You may need to take several steps to fix the errors on your credit report.
We recommend starting with the creditor. Contact them and discuss the issue. Sometimes creditors willingly fix the mistake with proper proof provided by you. If they are willing to fix it, make sure you follow through with the credit bureau to ensure the mistake was in fact fixed on your credit report.
If the creditor is unwilling to fix the mistake, you will have to file a dispute with the reporting credit bureau. You must do this in writing. We recommend that you write the letter not only to the credit bureau, but also to the creditor though. This way everyone is on the same page.
Your letter should be as detailed as possible. Include the date of the occurrence, the reason for the dispute, and include any proof that you have. You’ll then need to allow the credit bureau a little time to look into the situation. The law allows credit bureaus 30 days to investigate the issue. The credit bureau will be in contact with the creditor and yourself during this time.
Make sure you follow up with the right party if you have not heard anything, though. Don’t just assume the issue was fixed. You should have concrete evidence that it is fixed.
Reaching a Resolution
Once the credit bureau resolves the issue, they have to let you know the final decision. If they did make a change, they must provide you with another copy of your credit report free of charge. This gives you confirmation that the errors were fixed and no longer affect your credit score.
If the credit bureau does not agree with your dispute, they do not have to do anything except let you know. Upon your request, however, they can put a statement on the account that you disputed the issue. While this won’t improve your credit score, it will at least let future creditors know that you are a vigilant consumer. It also gives you the chance to talk to any future creditors about the issue, giving your side of the story.
Moving forward, always make sure you check your credit reports at least once a year, if not more often. This way you will know right away if there are any errors. You can get them handled right away before they affect your credit score too negatively.