Why Is This Important?

Businesses use the information in your credit report, notably payment history, to determine your creditworthiness and ultimately whether (or not) they will sell you their product on credit. If you receive approval, the information also helps them determine the interest rate you will pay.

In addition to showing your payment history, a credit report includes a credit score (payment history comprises 35% of your credit score). These two factors exert great influence on determining the risks involved in lending credit to you and the likelihood of repayment. The higher the risk, the higher the interest rate and vice versus for people with lower risk and great credit scores. After plugging in your information, banks, credit card companies and most large lenders apply complex algorithms that determine qualifications, rates, etc. Landlords, employers and other types of businesses simply review your payment history to make an educated decision based on your past for your future. We hope you now understand the importance of tracking this information closely.

Contrary to popular belief, checking your reports yourself does not drive your credit score lower. And rumors have circulated for several years that your credit score drops 1 point every time you or someone else checks your credit score. Two types of inquiries can be run on your credit. Hard Inquiries and soft Inquiries. Hard inquiries require your permission and can, in fact, cause your score to drop by a FEW points; soft inquiries do not require your permission and DO NOT damage your credit score. This is why it is so important for you to regularly check this information. This is especially important should you suspect any type of identity theft.

What is a Good Credit Score?

The answer depends on the type of credit score. Remarkably, more than 50 types of credit scores are out there. Most are associated with Fair Isaac Company (FICO) or VantageScore— FICO alone has 48— plus a handful of proprietary scores. The two most widely considered scores include FICO 8.0 and VantageScore 3.0. VantageScore was a joint creation of the three major credit bureaus, Equifax, Experian and TransUnion, and is FICO’s largest competitor. Both score differently; in fact, many differences even exist among the various types of FICO scores. Same goes for the different VantageScores. Here is a break down of both VantageScore 3.0 and FICO 8.0.

[Click to View Scoring Range]

What Should I Look For?

First, check the accuracy of your personal information, which includes the spelling of your name, birth date, Social Security number, addresses (current and former), employers (current and former), etc. This is an important first step because you need to confirm that the information is for you and not for someone with a similar name, birthdate, etc. You don’t want their bad buying habits negatively affecting your score.

Next, review all accounts listed in your report. You should see lists including credit cards, loans and other credit you’ve used during the last 10 years or so. Check all information for inaccuracies or entries that you don’t recognize. Look for things such as:

• Accounts that you do not recognizeThis is actually a common problem. A wrong digit was entered in a Soc Sec Number or a clerical error leads to something being listed on the wrong account.
• Inquiries that you do not recognizeThis could be a clear sign that someone is applying for credit in your name and that your identity may have been stolen.
• Payments marked late, but were paid on timeIf you know you paid on time and can prove it. This is an easy fix to a common problem.
• Debt amounts that are incorrectUnscrupulous companies can list incorrect amounts owed and hope that if they ever sue for the money and the defendant doesn't show up to defend themselves, that the court will rule in their favor (even if the amount is incorrect).
• Accounts in collections that are notSometimes people wind up in collections, unbeknownst to them. Sometimes it evens happens on accounts they are paying on every month. If this is the case, it is an easy thing to have removed.
• Paid-off debts still showing as activeThis has a name... It's called GHOST DEBT and is a real thing. Collections agencies will collect on debt and than recirculate it again years later in hopes it will just be paid and lost in the confusion of all the other debts someone may have.
• Items that are well beyond 10 years oldThis is a trickier one. Most debt has a statute of limitations and will expire between 5 and 10 years of the last payment. This differs from state to state and can be affected by things such as acknowledging the debt or a number of other things which could trigger another 10 years to start over.
• Negative marks that you simply are unaware ofAny generic negative mark left that is untrue and should be removed.

How Do I Fix Errors in My Credit Report?

If you find an inaccuracy on your credit report, it is important you take necessary steps to have it removed. First, get a more thorough report with information from all three credit bureaus. The easiest way to do this is by going online to AnnualCreditReport.com where you can file a request to have a full, detailed report. You are allowed to request one of these in-depth reports every year free of charge. If you would prefer to speak with someone directly to request your report, you can call 877-322-8228 or alternatively you can download a form here to complete and “snail-mail” at your convenience.

You need to check if this inaccurate information is on all three reports and try to find any additional information regarding the issue. You may see details that help uncover the problem and in some cases remind you that the entry in fact was accurate all along. If the issue is on only one of the three reports, you can use the other two reports as part of your evidence that the information is inaccurate. Gather any other pieces of documentation that you can find to help show that the information is incorrect. After you have compiled all the documentation you need to make your case, your next step is to send it to the specific bureaus to have the adjustments made.

You will need to open a dispute with each credit bureau that shows the error(s) on it’s report. You can mail the information you’ve collected, call to discuss the disputes (TransUnion and Equifax only) or use the links below to start an online dispute.