Your credit report can impact a many areas of your life. Although creditors usually consider a number of factors in deciding whether to grant credit, most creditors rely heavily on your credit history. Credit card companies, mortgage lenders, insurers and employers all use your credit report to make decisions about you and your life. The fact is that all legitimate creditors want to know whether you are likely to be a good credit risk. If there are inaccuracies in your credit report, it can cost you money by resulting in increased interest rates. It could also keep you from your dream job.
Job opportunities are becoming increasingly dependent on credit reports and credit profiles. Prospective employers are getting a credit report on new job applicants as a way to assess their character as well as measuring financial stress.
Insurance premiums with insurance companies are becoming correlated to credit scores and credit reports. Most insurance companies consider that there’s a association between good credit scores and fewer insurance claims, so you may get better rates with a higher score. In worst cases, a low score could even mean fewer insurers are willing to offer you coverage at all.
Other services that may be dependent on a good credit score include deposits and agreements for gas service, electric utilities, cable service, phone and cell phone services.
At a minimum a consumer should make sure everything in their credit report is accurate and up to date to avoid the delays and problems a poor credit report and credit score can cause. After that, if the credit report shows significant blemishes or a low credit score there are a few actions to take.
Check your credit report regularly. Check your report with the three largest credit reporting agencies, Equifax, Experian and TransUnion at least once or twice a year. If you plan on making a major purchase, such as a house or a car, review your credit reports at least 3-6 months beforehand. If there are errors in your credit report, this will allow you time to investigate and correct any mistakes before they affect your purchase.
Know what to look for. Make sure that in addition to late payment reports, you are aware of other damaging information that may be more difficult to spot. Verify the balances, account status and the dates all accounts were opened. These errors can have a big impact on your credit score, which can affect your ability to get a loan.
Typographical errors or mistakes in your address wont have a major effect on your credit score, so these inaccuracies are not important. If you find inaccuracies, you can dispute them to have them removed from your credit record. If the reports are accurate, they stay on your record for up to 10 years.
Report the problems in your credit report right away. If you spot an error in your credit report, make sure that you report it immediately. You can contact the creditor directly and if you can provide documentation, they will contact the credit reporting agency and correct the error during the next scheduled update.
If you are unable to work with your creditor to remove any inaccuracies, you can dispute errors directly to the credit bureaus. Credit inaccuracies can be dispute online or through the mail. Once you start dispute proceedings, the credit bureau has 30 days to investigate and correct the error. By keeping your credit report free of errors, you will be ready for your next major purchase or transaction or any other service that is dependent on a good credit report and credit score.