Credit report errors can include the wrong name or address on an account or an incorrect date you made a payment. Learn from the Consumer Financial Protection Bureau (CFPB) about the common types of credit reporting errors.
Personal Information Errors
Here are some of the most common identity errors that you should look out for: Incorrect name. Misspelling of your name. Incorrect middle initial.
Common Credit Report Errors to Look For
Incorrect personal information/identity errors: Your name may be misspelled, or someone with a similar name may show up on your account. Your report may show other personal identification errors, such as an incorrect address, birthdate, or Social Security number.
While your credit report features plenty of financial information, it only includes financial information that's related to debt. Loan and credit card accounts will show up, but savings or checking account balances, investments or records of purchase transactions will not.
Not checking your credit score often enough, missing payments, taking on unnecessary credit and closing credit card accounts are just some of the common credit mistakes you can easily avoid.
Both the credit bureau and the business that supplied the information to a credit bureau have to correct information that's wrong or incomplete in your report. And they have to do it for free. To correct mistakes in your report, contact the credit bureau and the business that reported the inaccurate information.
Character, capital (or collateral), and capacity make up the three C's of credit. Credit history, sufficient finances for repayment, and collateral are all factors in establishing credit. A person's character is based on their ability to pay their bills on time, which includes their past payments.
Rule #1: Always pay your bill on time (and in full) The most important principle for using credit cards is to always pay your bill on time and in full.
Making minimum payments only and using cards for everyday purchases are two of the most common mistakes. The benefits of rewards can be small, while cash advances can be costly. Never pay your medical bills with your credit card and be sure you never ignore your debt.
Note: This is one of five blogs breaking down the Four Cs and a P of credit worthiness – character, capital, capacity, collateral, and purpose.
Making payments on time, keeping credit utilization low and avoiding unnecessary credit inquiries can help you improve your credit scores. Focusing on good credit-building habits, rather than quick fixes, can help improve your credit over time.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Missing a card or loan payment
Payment history accounts for 35 percent of your FICO score. According to a FICO simulation, a payment that is 30 days late can cost someone with a FICO 9 credit score just over 790 as much as 80 points.
When it comes to credit reports, the worst credit score you can possibly have is 300, and the highest score you can have is 850. According to Experian, one of the three leading credit bureaus, the average credit score in the United States is 714.
Payment history is the most important factor in maintaining a higher credit score. It accounts for 35% of your FICO score, which is the score most lenders look at. FICO considers your payment history as the leading predictor of whether you'll pay future debt on time.
However, they do not consider: Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
Race, religion, national origin, sex, and marital status
The Consumer Credit Protection Act prohibits the use of this information by lenders, as well as the receipt of any public assistance, or the exercise of any of your consumer rights.
The information that is contained in your credit reports can be categorized into 4-5 groups: 1) Personal Information; 2) Credit History; 3) Credit Inquiries; 4) Public Records; and, sometimes, 5) a Personal Statement. These sections are explained in further detail below.
Even one missed payment, carrying high balances or co-signing a loan are some of the things that can hurt your credit.
What are the top errors on credit reports? The most common credit report errors are accounts that are too old, accounts with the wrong balances, accounts with the wrong payment history, mixed credit files, identity theft accounts, and being mistakenly reported dead.