Request your free Free annual credit report before appying for that loan
If it happens to you, it wouldn’t be the first time it’s happened, but that won’t make the experience any more pleasant. Over the years, many credit worthy borrowers have applied for loans in good faith, only to be blind sided by an inaccurate or erroneous entry in their credit report. This is one of the reasons that the Fair Credit Reporting Act, enforced by the Federal Trade Commission, requires each of the major credit reporting agencies to provide you, me and every other citizen of this country with our own Free annual credit report once every twelve months, upon request.
For several good reasons, the companies don’t send these reports out automatically. You must request this service. Commonly known as the Big Three, these companies are Equifax, Experian, and TransUnion. Each uses different criteria for ranking credit scores, so don’t be surprised if all the numbers are different. Your actual credit score as seen by your banker is an average of the three scores provided. It is not the responsibility of credit reporting agencies to investigate or verify entries on your credit report, just to record and report them. The rest is up to you, which is why we are all granted a Free annual credit report. Reviewing and correcting erroneous information on an individual’s credit report is the responsibility of the individual.
Aside from simple human error, there are any number of reasons that erroneous information can end up on your credit record, and the reporting agencies have no way of knowing the difference. For example, if you had a slow or disputed payment that you eventually paid, the creditor may have reported the debt, but often will not bother to report that the debt has been satisfied after you make the payment. Sometimes someone else’s information ends up on your report. If you have been the victim of identity theft, there will almost certainly be inaccuracies in your credit report.
When you receive your Free annual credit report from each company, go through all three of them carefully. Information may appear on one and not on another. You can dispute inaccuracies in writing in order to clean up your reports and raise your overall score, and there are online sites who specialize in providing this sort of information. The people who operate these websites are ready to help and pleased to do so.
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