Have you tried to finance a car or buy a house? If you have, then chances are you know just how important your credit report is.

A better credit score generally means that you’ll receive better interest rates as well as more favorable credit terms. There’s a good chance that you’ll have to put down less of a down payment, so long as your credit looks good. In the terms of loans, good things come to those with good credit.

So, what happens if your score isn’t good? What if it’s actually kind of bad, and maybe even to no fault of your own? This does happen, especially if you don’t have a lot of experience or knowledge in dealing with credit. However, if you are willing to put in the time, it is possible to wipe the errors clean off your report. Want to know how? Keep reading!

What is a Credit Report?

A credit report is a report card that shows just how well you manage your credit. It shows all debt that you currently have, how often you pay your bills, and even any public history, such as a bankruptcy or a judgment, that you may have.

Sure, there are various credit reporting agencies, with the three biggest bureaus being Experian, Transunion, and Equifax. These credit reporting bureaus review your credit history numerically and then provide you with a score that ranges between 300 and 850. Just in video games, you’ll want the highest score possible because the higher the score, means the better your credit.

Banks, lenders, and landlords use credit reports to determine whether or not you’re a worthwhile candidate to extend credit to. Depending on the line of work, a prospective employer may review your credit report as part of their hiring process.

Under the Fair Credit Reporting Act, a credit bureau isn’t permitted to report information that is fraudulent or not accurate. If a consumer disputes the information on their credit report, the bureau is required to investigate the complaint and remove the information and the information that wasn’t incorrect. A few common errors that can be found on a credit report are:

Late Payments

Late payments are never good, and they are oftentimes reported to the credit bureau. Those pesky late payments can have a downright horrible impact on your credit and even stay on your report for up to seven years. What if it wasn’t your fault? As a matter of fact, creditors do make mistakes once in and while. In the unlikely situation that your payment was posted to someone else’s account, or perhaps it did arrive on time but was accidentally reported as late, you can avoid this hit on your credit. All you need to do is prove the error. Consider the following when attempting to repair your credit report.

  • It’s a good idea to pull your credit report from all three of the major credit bureaus to see where the discrepancies are showing up.
  • Reach out and contact the creditor explaining your situation. Ask if they can contact the credit agency on your behalf to remove any inaccurately recorded late payments. It’s not a bad idea to get this agreement in writing.
  • File a dispute against the claim with the credit reporting agency. It doesn’t matter if the creditor already agreed to contact the agency for you, it’s wise to still dispute the claim regardless.

Repairing your credit doesn’t happen overnight. Be sure to give it a few weeks before you attempt to pull your new credit reports again. If these methods don’t work the first time, then you will have to contact the creditor and credit reporting agency and try again.

It Wasn’t Your Account

Note that companies that report your credit activity directly to the credit bureaus can also make mistakes. Sometimes there are errors with the spelling of names or improperly recorded social security numbers. When this happens, it can oftentimes result in someone else’s delinquent account showing up on your credit report. Possessing a delinquent account on your credit report can negatively impact your overall credit score. That’s why it’s important to dispute accounts that aren’t yours as soon as you see the error. Once you realize what’s going on, contact the credit bureau to have the rogue account removed.

Mistakes

Perhaps your credit report correctly shows that you owe money to someone, but the discrepancy is in the balance owed. Or maybe a credit card company made a mistake when reporting your total credit line. If you are a loan holder, you may notice errors regarding the terms, or it could even be showing up as past-due when it’s not.

Filing a Dispute

It’s important to dispute any errors you find on your credit report ASAP. It’s not something you’re going to want to sleep on as it can take a few weeks for the credit bureau to get around to your complaint. If you wait too long, you’re ultimately putting yourself at risk of lowering your credit score. This can drastically impact your ability to get approved for a loan or rent an apartment until you take care of the situation.