Then I'm sure you know that lenders use Credit Reports to score your credit-worthiness. Many Lenders rely on Credit Reports which use confusing scientific formulas to see how much of a credit risk a consumer is most likely to be.
You may already know that credit scores are calculated using the information on your credit reports. Errors on your credit reports and credit scores can severely damage your reputation. For this reason, I encourage you to review your reports at least once per year.
After checking your reports you may need to file a dispute to correct errors. This article has 10 disturbing reasons why you may need to file a credit dispute.
1. 79% of Credit Reports Contain Errors.
In 2004, the Public Interest Research Group found that 79% of credit reports have errors. Up to 25% of the errors have been bad enough to prevent borrowers from obtaining credit.
2. Inaccurate Status of Accounts.
According to a 2004 Federal Reserve Bulletin, 15% of credit reports list 'Stale Accounts' as a 'Major Derogatory' on your credit reports. A Stale Account is one that is out of date. A Major Derogatory is a big negative on a credit report.
3. Incomplete Information given to the Big Three Credit Bureaus.
The Big Three Credit Agents (Bureaus) are; Equifax, Experian and Trans-Union. Creditors voluntarily report Consumers information to the Big Three Credit Bureaus. Creditors report the following types of Credit details:
Please make sure that your 'Payment Status' is correct for all accounts?
If you find that positive payment performance is not being reported, feel free to ask the Creditor why. You may have to file a dispute if the information is listed incorrectly. Or you may need to move your account to a lender that reports on-time payments for accounts.
4. Collection Agencies often Mismanage Collection Accounts.
The General Accounting Office, in a Consumer Credit Study, found that there are "data quality issues" regarding Consumer Files within Collection Agencies. For example, a Collection Account that is Stale can be incorrectly updated and appear to have recent activity on the account.
Mismanaged Accounts may disrupt your chances of getting a new loan, or line of credit; opening a Bank Account, Renting an apartment, or landing a new job.
Check your Credit for any Collection Agency Accounts. You may have to file a Credit Dispute to change the status or remove the account from your Credit Report.
5. Collection Agencies Duplicate Accounts.
Collection Agencies have been known to duplicate accounts. For example; say Collection Agent "A" attempts to collect on a delinquent account and reports the account (in question) to the Credit Reporting Agencies.
After a few months of failure to collect Collection Agent "A" gives up and sells the account to Collection Agent "B". Collector "B" updates the account on your Credit Report as owned by them.
In the mean-time Collection Agent "A" failed to update their records with the Credit Agencies...
The result is a duplicate derogatory entry on your credit report. Duplicate Reports can severely damage your Credit Score and shrink the chances of securing a Loan.
Check your Credit for Collection Accounts. Double-check for duplicate collection listings. If you find a duplicate record, it would be wise to "Validate" both accounts to determine if any of the duplicate are valid claims against your good name.
6. Miss-assigned Collection Accounts.
Sometimes after validating a delinquent account you may be shocked to find that Collection Agent "A" has miss-assigned the account to Collector "B". Miss-assignment of Collection Accounts occurs quite often.
You may have to Validate the debt and correct the records of both Collectors "A" and "B".
7. Major Derogatory.
A Good Lender will not extend a new loan until the Borrower addresses any "Major Derogatory". For example, if you've tried to refinance your Auto or Home Loan, but denied, there may be a Major Derogatory listed on your Credit.
You may need to file a dispute to address any Major Derogatory in advance of applying for Credit. It can be very embarrassing trying explain a Major Derogatory to a Lender. Check your Credit Report. If you find any derogatory information, investigate it. If the derogatory information is inaccurate, consider filing a credit dispute to correct the record.
8. Credit Reporting Agencies Gather Information that the Courts Have not Yet Acted upon. One of the most reviewed items on Consumer Credit Reports are Public Records. Lenders, Landlords, and even Employers check the Public Records section of Credit Reports to see what legal actions have been taken against the Borrower, Lessee or Employee.
Due to no fault of their own, Credit Reporting Agencies have been known to gather information that the Courts have not yet acted upon.
For example, let's say you've fallen a couple of day's behind on your rent? You made arrangement's to pay your rent by an agreed to date. The Landlord agrees, but to protect their interest, the landlord filed an eviction notice in case you don't pay.
That eviction filing then becomes Public Record. But since you paid the rent as agreed the case was dismissed. But your Credit Report may have an eviction filing that may not have been updated.
9. Inconsistent Reporting of Dismissed Items in Public Records.
Nothing can be more frustrating than looking at dismissed court filings listed as Public Records. This occurs more often than people would like to believe. Credit Bureau's can report dismissed item's inconsistently. Sometimes credit files are updated to reflect the dismissal. Other times you may have to file a dispute to have the information corrected.
10. Inaccurate Information Regarding Lawsuits.
This one ties into the last two above. From the example above, the eviction notice was dismissed, but when you examine your Credit Report, you find that it's listed as an eviction. You were never evicted. You paid your rent as agreed. But your Credit Report states that you were evicted. That's an unfair assessment of your Credit-Worthiness.
You have the Right to have an error free Credit Report. But please don't file disputes for everything listed on your Credit Report? Doing that could cause your disputes to be flagged as frivolous.
Also correcting credit errors is a process that takes time. But if done properly, a Credit Dispute can keep you from loosing your credit worthiness.
You may already know that credit scores are calculated using the information on your credit reports. Errors on your credit reports and credit scores can severely damage your reputation. For this reason, I encourage you to review your reports at least once per year.
After checking your reports you may need to file a dispute to correct errors. This article has 10 disturbing reasons why you may need to file a credit dispute.
1. 79% of Credit Reports Contain Errors.
In 2004, the Public Interest Research Group found that 79% of credit reports have errors. Up to 25% of the errors have been bad enough to prevent borrowers from obtaining credit.
2. Inaccurate Status of Accounts.
According to a 2004 Federal Reserve Bulletin, 15% of credit reports list 'Stale Accounts' as a 'Major Derogatory' on your credit reports. A Stale Account is one that is out of date. A Major Derogatory is a big negative on a credit report.
3. Incomplete Information given to the Big Three Credit Bureaus.
The Big Three Credit Agents (Bureaus) are; Equifax, Experian and Trans-Union. Creditors voluntarily report Consumers information to the Big Three Credit Bureaus. Creditors report the following types of Credit details:
- The date that the Account was established;
- The type of Account (revolving, installment, mortgage etc.);
- The highest balance owed;
- Credit Limits (where applicable);
- Payment Performance Information.
Please make sure that your 'Payment Status' is correct for all accounts?
If you find that positive payment performance is not being reported, feel free to ask the Creditor why. You may have to file a dispute if the information is listed incorrectly. Or you may need to move your account to a lender that reports on-time payments for accounts.
4. Collection Agencies often Mismanage Collection Accounts.
The General Accounting Office, in a Consumer Credit Study, found that there are "data quality issues" regarding Consumer Files within Collection Agencies. For example, a Collection Account that is Stale can be incorrectly updated and appear to have recent activity on the account.
Mismanaged Accounts may disrupt your chances of getting a new loan, or line of credit; opening a Bank Account, Renting an apartment, or landing a new job.
Check your Credit for any Collection Agency Accounts. You may have to file a Credit Dispute to change the status or remove the account from your Credit Report.
5. Collection Agencies Duplicate Accounts.
Collection Agencies have been known to duplicate accounts. For example; say Collection Agent "A" attempts to collect on a delinquent account and reports the account (in question) to the Credit Reporting Agencies.
After a few months of failure to collect Collection Agent "A" gives up and sells the account to Collection Agent "B". Collector "B" updates the account on your Credit Report as owned by them.
In the mean-time Collection Agent "A" failed to update their records with the Credit Agencies...
The result is a duplicate derogatory entry on your credit report. Duplicate Reports can severely damage your Credit Score and shrink the chances of securing a Loan.
Check your Credit for Collection Accounts. Double-check for duplicate collection listings. If you find a duplicate record, it would be wise to "Validate" both accounts to determine if any of the duplicate are valid claims against your good name.
6. Miss-assigned Collection Accounts.
Sometimes after validating a delinquent account you may be shocked to find that Collection Agent "A" has miss-assigned the account to Collector "B". Miss-assignment of Collection Accounts occurs quite often.
You may have to Validate the debt and correct the records of both Collectors "A" and "B".
7. Major Derogatory.
A Good Lender will not extend a new loan until the Borrower addresses any "Major Derogatory". For example, if you've tried to refinance your Auto or Home Loan, but denied, there may be a Major Derogatory listed on your Credit.
You may need to file a dispute to address any Major Derogatory in advance of applying for Credit. It can be very embarrassing trying explain a Major Derogatory to a Lender. Check your Credit Report. If you find any derogatory information, investigate it. If the derogatory information is inaccurate, consider filing a credit dispute to correct the record.
8. Credit Reporting Agencies Gather Information that the Courts Have not Yet Acted upon. One of the most reviewed items on Consumer Credit Reports are Public Records. Lenders, Landlords, and even Employers check the Public Records section of Credit Reports to see what legal actions have been taken against the Borrower, Lessee or Employee.
Due to no fault of their own, Credit Reporting Agencies have been known to gather information that the Courts have not yet acted upon.
For example, let's say you've fallen a couple of day's behind on your rent? You made arrangement's to pay your rent by an agreed to date. The Landlord agrees, but to protect their interest, the landlord filed an eviction notice in case you don't pay.
That eviction filing then becomes Public Record. But since you paid the rent as agreed the case was dismissed. But your Credit Report may have an eviction filing that may not have been updated.
9. Inconsistent Reporting of Dismissed Items in Public Records.
Nothing can be more frustrating than looking at dismissed court filings listed as Public Records. This occurs more often than people would like to believe. Credit Bureau's can report dismissed item's inconsistently. Sometimes credit files are updated to reflect the dismissal. Other times you may have to file a dispute to have the information corrected.
10. Inaccurate Information Regarding Lawsuits.
This one ties into the last two above. From the example above, the eviction notice was dismissed, but when you examine your Credit Report, you find that it's listed as an eviction. You were never evicted. You paid your rent as agreed. But your Credit Report states that you were evicted. That's an unfair assessment of your Credit-Worthiness.
You have the Right to have an error free Credit Report. But please don't file disputes for everything listed on your Credit Report? Doing that could cause your disputes to be flagged as frivolous.
Also correcting credit errors is a process that takes time. But if done properly, a Credit Dispute can keep you from loosing your credit worthiness.
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