Does it really matter if I have errors on my credit report?
Absolutely! It is very important to fix errors found on your credit report so that only correct and accurate information is being reported. First, your credit score can be significantly impacted by the errors found on your report. This can lead to higher interest rates when applying for new lines of credit or loans. These errors could even lead to a creditor or service provider outright denying your application for something as simple as a cell phone or television service. Secondly, you want to make sure you are not being held responsible for debt that may not be yours, or that you may not have authorized. Thirdly, maintaining an accurate and correct credit report is one of the key ways you can combat identity theft.
How can fixing errors on my credit report impact my credit score?
Your credit score is determined by a mathematical formula based on categories of varying “weights” or levels of impact. These categories include: Payment History (35%), Account Balances (30%), Length of Credit History (15%), Types of Credit In Use (10%), and New Accounts (10%). Based on this commonly used formula, any negative information in one of these categories can decrease your overall credit score. Since each category makes up a different percentage of your overall score, some errors might impact your credit score more than others.
How can fixing errors on my credit report protect my finances?
When you review your credit reports, you might notice accounts listed that do not belong to you. It is your right to have items you believe to be incorrect, updated and/or removed from your credit report.
How can fixing errors on my credit report help protect my identity?
When a criminal steals your identity, they often apply for and open lines of credit or obtain cash loans under the victim’s identity. The credit bureaus and grantors are not aware that you did not authorize this credit/loan until you inform them. As far as they are concerned, you now have a legal obligation to pay for the money that they think you borrowed.
How can fixing errors on my credit reports help in finding a new job?
Most employers today conduct a background check on their potential employees. In some cases a credit check is included as part of this background check. While most companies do not require a specific credit score (some might), a credit check might be conducted to make sure you have not committed forms of financial or credit fraud. As such, applicants with certain errors on their credit reports might be disqualified from a job.