Looking for errors on your credit report

You can start improving your score by reviewing your credit reports. Dips in your credit score may be due to mistakes on your report — an erroneous late payment or a lower credit limit than you actually have. Correct those mistakes, and your score will rise.

If you check each of your credit reports once a year, you should never have to pay. You’re entitled by law to see your information every 12 months for free. The three nationwide credit bureaus manage one official website that gives you these free credit disclosures: annualcreditreport. com.

You’ve probably seen many other offers for a “free credit report.” Just be aware that the Federal Trade Commission has issued a consumer alert for these claims. These other offers tend to be packaged with subscription fees for paid products.

When in doubt, your safest bet is to link to annualcreditreport.com through the FTC website,  www.ftc.gov. You’ll also find the official toll-free phone number for requests (1-877-322- 8228), and the order form you can use to mail in a request.

Once you have your reports, here’s what to look for:

Accounts that aren’t yours. A fraudulent account on your records will do extensive damage to your credit, as the perpetrator runs up bills in your name and loads your report up with delinquencies. If you see an account that you didn’t sign up for, alert the issuing financial institution and the credit bureaus immediately. The steps you can take are available on http://www.ftc.gov/idtheft.

Incorrect late payments. On your credit reports, verify any of the payments marked as “late” with your records, as well as the time frame in which they occurred. A 90-day late payment is much more severe than a 30-day late payment. If you notice an error, make copies of your records to use when you file a dispute.

Resolved issues still marked with outdated information. If you’ve paid a late account or a collection item and the payment is not recorded on your report, dispute the error and get your points for your efforts.

Inaccurate balances and credit limits. If your credit reports list higher balances or lower credit limits than you actually have, it will appear as though you’re using a greater proportion of your credit than you really are. That will adversely affect your score.

Inaccurate opening dates. It’s a good idea to check your opening dates, and get credit for all of the years your account has been active. The length of time your accounts have been established counts for 15 percent of your score.

Missing accounts. Not all financial institutions report to the three credit bureaus– the process is voluntary. If your credit score is low because you have an insufficient number of accounts open, it can help to have your missing account on record. Explain your situation to your financial institution, and ask them to report the information.

Inaccurate personal information. These inaccuracies could be due to a misread form, a data input error, or something more serious — a change of address and an identify thief behind it.

When you have a dispute, keep everything in writing, include copies of r ecords that verify your claim, and be clear about the specific change you want in your report. Clarity will lead to a quicker resolution and a potentially higher score.

Michael Camacho is the president and chief executive officer of Personal Finance Center. He has more than 18 years experience in retail banking and with financial institutions in Guam and Hawaii.

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