More than 80 percent of Americans have fallen victim to credit reporting errors that result in a lower FICO score than they are entitled to. When it comes to big purchases like a home, even a single error on your credit report may result in you paying tens of thousands more in interest fees because of your credit score. Let’s look the most common mistakes found on credit reports.
Incorrect personal information
One of the most common mistakes found on credit reports is incorrect personal information. If the report lists the wrong address or the wrong middle initial for your full name, that could be a sign that the credit bureau has confused you with someone else who has a similar name. Double check your name in all instances, your social security number, and employment history. It is imperative that only your personal credit history is being considered.
Accounts not Belonging to You
If you see a credit account or loan on your report that you don’t remember opening, your identity may have been stolen. You need to take immediate action before further damage is done. Scorewell can assist you with identity theft monitoring services to make sure any changes to your credit profile are reported to you instantly.
Outdated Balance or Credit Limit Information
Your credit utilization ratio is a measure of how much credit you’re using versus how much is available to you. If the credit bureau doesn’t have accurate information on how much you owe and what your credit lines are, your credit utilization ratio could appear to be much higher than it actually is. A high utilization ratio results in a lower credit score.
Closed Accounts Reported as Open
If your credit report shows a revolving debt that you have already paid off, your credit utilization ratio will be incorrectly calculated and lower your credit score.
Duplicate accounts also can raise your credit utilization ratio, which makes you look like you’re carrying more debt than you actually are.
Inaccurate Payment History
Make sure your report doesn’t list any late or missed payments that you know you’ve paid on time. Late payments are a major red flag on a loan applicant’s credit report, so this type of inaccuracy needs to be fixed.
Connect with Scorewell today to discuss how to identify and correct errors on your credit report and get you on the way to achieving your highest possible credit score.