Every person in the United States who has taken out a loan or another kind of credit has his own credit report and credit score. A credit report indicates to lenders and other parties the loans that the person has taken out in the past and his record of paying them back. Good credit reports qualify a person for low-interest loans. However, errors can crop up on these reports for various reasons.
Credit Report
A credit report will include a number of listings of debts that a person has taken out. These reports, which are put together by credit reporting bureaus, are compiled using data that is reported to the bureaus by thousands of different lending companies and other businesses that provide individuals credit. Although these companies strive for accuracy, individuals entering the data can sometimes make mistakes, leading to faulty records.
Mistakes By Creditors
If a debt is incorrectly listed on a person's report, this may be the fault of the creditor who reported the data. Many creditors have thousands of debtors who they are trying to collect from. In the course of being repaid, these creditors may lose or confuse payments from individuals. If a mistake is listed by all three crediting reporting bureaus -- Experian, TransUnion and Equifax -- the mistake is likely the creditor's fault.
Misrecording
In some cases, a credit reporting bureau may misinterpret information provided by a creditor. For example, a creditor reporting that John G. Smith of San Francisco has taken out a loan for $5,000 may be entered as John H. Smith, leaving an inaccurate record on John H. Smith's account. This error will only be noticed if John H. Smith checks his report and discovers the erroneous debt.
Solution
When a debt is listed on a person's credit report by mistake, it is imperative that he change it, particularly if he believes that the record is bringing down his credit score. Under U.S. law, credit reporting bureaus are legally obligated to keep accurate records. Therefore, a person should attempt to contact both the credit rating bureau that has recorded the error and the creditor who the debt is listed with.
0 comments:
Post a Comment