Your credit report is often vital when applying for a loan, renting an apartment or home and even gaining certain types of employment, but what happens when there are errors present? Forbes reports that more than 25% of Americans have mistakes listed on their credit reports, occurring across the three major reporting agencies of TransUnion, Experian and Equifax.
There are several factors that may cause errors on your credit report, and understanding what they are may help you repair reporting problems that could prevent you from obtaining loans and other types of credit.
Online purchasing and bill payment options are convenient but may lead to identity theft. When this occurs, thieves can open new lines of credit in your name, max them out and leave you on the hook for the charges. You may want to check your report at least once a year for charges you do not recognize.
Erroneous account status
If you paid off and closed a credit card account but it remains reported as open, this could affect your credit status. Continued incorrect reporting to a credit reporting company might negatively affect your ability to open new lines of credit, especially if the account appears on your report mistakenly as open or still in use.
When a collections company transfers a debt to a different reporting company and the original agency fails to close the file, there may be more than one report of the same debt. You can prevent this by reviewing your report for multiple or duplicate charges.
Reviewing and correcting your credit report is ultimately your responsibility. You can obtain a free report from any agency on an annual basis.