Check Your Credit For Free
Lately news sources and credit protection companies have touted the ills of identity theft. And while identity theft is a serious issue, thieves aren’t the only ones who can cause erroneous information to show up on your credit report. As a loan officer, I would estimate that more than half of the credit reports I review have erroneous information on them. And most of these errors are coming from your credit grantors.
One of the most common errors is incorrect balances. Usually every month your mortgage, car loan, student loan, and credit card companies report your balances to one of the three major credit bureaus. What happens though is that when you pay off a balance or when you close an account the balance showing on your credit report may not be updated to $0. Similarly, when you report a credit card lost or stolen and are issued another card with a new number, often times the old card remains on your report with an unpaid balance remaining.
Now most times, these small errors won’t prevent you from getting a mortgage or a car loan. Most lenders can analyze a report and will notice obvious errors. However, as mortgage companies and other lenders automate their underwriting process to save money and time, these small errors start to make more of a difference.
Another common source of errors occurs between sons and fathers with junior and senior suffixes to their names. Junior’s maxed out credit card can tank dad’s score. And dad’s information can also show up on his son’s report for good or bad.
Another common error on credit reports is that negative information is reported for more than seven years. For example, if you have a tax lien that was paid off seven years ago, it should not still be reported in your derogatory items section of your report. Derogatory items should only be reported for seven years and bankruptcies for ten years.
So the take home message here is that chances are your credit report has errors on it regardless of whether your identity was stolen . The best thing to do is review your report at least annually. You can do this for free by visiting www.annualcreditreport.com. By federal law you are allowed to get one free credit report from each of the three bureaus once every 12 months. The last time I viewed mine I had to enter my information three different times so that I could see what each bureau is reporting on me.
The only problem with this free website is that it does not report your scores. But typically most people know what range of score they are in. If you don’t, you can pay a nominal fee and get your score too from each bureau. Either way, make it a point to check out your report with each bureau right away.
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