When it comes to reviewing and keeping up with your credit report, there’s really no getting around the fact that due diligence is an absolute necessity. Your credit report literally establishes not only how easy it will or will not be for you to obtain credit, it also determines how much you will have to pay for that credit by setting the interest rate. The lower your credit score, the bigger risk you present to a lender; thus, your interest rate will be higher to compensate the lender for assuming this greater risk.
It’s also imperative that you review reports from all three, nationwide credit reporting agencies: Experian, Equifax, and TransUnion. Many times, a creditor will only report to one of the three agencies, so it’s not unusual for the three reports to differ. If you are applying for a mortgage, or other hefty loan, the lender will take the average of all three reports to come up with your credit score.
Corresponding with the three credit reporting agencies isn’t particularly pleasant, but should you dispute a transaction on your credit report, it’s a necessity. Make sure you document every phone call, email, and letter sent through snail mail, scrupulously. Treat all interaction with them as sacrosanct, just as you would if you were dealing with the IRS. Here’s why: when it comes to making your life a living nightmare, there are few agencies that can do it quite as thoroughly as Experian, TransUnion and Equifax.
If you own a business or more than 20% of the shares in a corporation, your personal credit reports will come under scrutiny if you attempt to gain access to the company capital. And when it comes to lending, the bank will ask for a personal guarantee should the business hit the skids, forcing it to be unable to make necessary loan payments.
According to allbusiness.com, 70% of all credit reports contain errors, or incomplete/inaccurate information. And, as unfair as it may seem, the onus is ALWAYS on the individual to correct those anomalies that ruin credit.
While going over your credit report with a fine tooth comb should happen annually, it’s a good idea to peruse them, at least casually, once every quarter.
Should you dispute something on your report, you must contact the credit reporting agency; they will take the transaction in question off of your report for 45 days, while they either correct it, or verify it’s accuracy through the creditor. If, after 45 days they cannot collaborate the error, the glitch will be permanently removed from your credit report.
If, however, they are able to verify the problem with your lender, you will need to switch gears, and begin trying to rectify things with the creditor. Make sure you gather all of the receipts necessary to prove that you made your payments in a timely fashion.
The Fair Credit Reporting Act requires all three credit reporting agencies to provide consumers a free credit report once every 12 months, thru www.annualcreditreport.com. You can order all three at once, or spread them out over the year.