When applying for a car loan, credit card, or mortgage, lenders all take a good, hard look at many aspects of your financial life, and that includes your credit report. This document contains many personal details, such as your name, date of birth, addresses, places of employment, and your social security number, as well as your financial information. Every credit card you applied for, every missed or late payment, and every loan you have will be listed on your credit report for all lenders to see.
Why is this point important? Lenders will use the information on your credit report to help determine your creditworthiness, which is the likelihood that you will pay back a loan on time and in full. Your particular level of creditworthiness is used in determining the amount you are allowed to borrow, the interest rate, and other terms of your agreement. And it doesn’t just apply to mortgages, car loans, or credit cards, but in some cases, whether you are allowed to rent an apartment or be eligible for certain employment. Therefore it’s in your best interest to do what you can to keep your finances in great shape.
But even if you have been fastidious in your finances, this fact may not be reflected on your credit report. Did you realize that, according to a study by the Federal Trade Commission, that over 42 million Americans have errors on their credit report? These errors can include missing information, out-of-date details, or inaccuracies. And while some of these errors may be simple, just as a wrong address, others can be more serious – such as listing missing payments that you never missed, or showing a bankruptcy that should have been discharged. These inaccuracies can negatively affect your ability to obtain a credit card or mortgage, or affect the terms of your loan.
Under the Fair Credit Reporting Act, you are legally entitled to receive a free copy of your report once a year from the website www.annualcreditreporting.com for a selected credit reporting agency such as TransUnion.
After you receive your copy, look through the details carefully. First, make sure the report contains only your details. For example, your report may contain mailing addresses where you have never lived. Next, review the details for anything that is incorrect, missing, or out-of-date.
If you received your credit report from TransUnion and want to dispute details, follow these steps:
For your records, always keep copies of your TransUnion dispute letter and any supporting documentation you provided.
Note that TransUnion is allowed to dispute your claim within 30 days of receiving your details. Additionally, TransUnion may disagree with your dispute and as such, may not change details on your credit report. They will send you a copy of their investigation results.
If any of your information is corrected as a result of your TransUnion dispute, the business is required to notify the credit reporting agency, in this case TransUnion, so it can update your report with the correct details.
If you have any problems with reporting issues in your TransUnion dispute or any other credit reporting agency, you can submit a complaint with the Consumer Finance Protection Bureau.
Finally, if you think any errors on your credit report are due to identity theft, see the Federal Trade Commission website about identity theft. You can file a fraud alert and even freeze your credit report.
Don’t become complacent about your finances. The accuracy of your financial records can help or hinder your efforts to obtain a mortgage, car loan, or credit card. Make the effort to get a copy of your credit report from TransUnion and other agencies, and dispute anything that is not right.