In today’s society, your credit report may be more important than it has ever been during any other time. Recently, there have been financial ups-and-downs such as the stock market dropping, loan interest rates rising, gas prices skyrocketing, and home mortgages failing. What could be the most important thing you need to watch out for are errors on your credit report.

Importance of Your Credit Report

Credit reports are like reflections in a mirror; everyone has them but some look better than others. The great credit reports are the ones where the person represented has paid their debts off on time, and their credit cards are all in good standing. The not-so-great ones show delinquent payments, write-offs for non-payment, and maybe even bankruptcies and repossessions. The more of these bad types of marks there are on your credit report, the worse the “reflection” is for that person and that bad reflection can scare credit lenders away fast. Sometimes credit reports contain errors, which were made by reporting companies, or even fraudulent charges made in your name by someone acting as if they were you. These erroneous charges will make your report very bad very fast. Review your credit report at least once a year, to make sure there aren’t any charges on it that you did not make. Before we go into how to find and repair an error, lets first talk about who makes the credit reports.

Requesting Your Credit Report

There are three credit report companies, or bureaus, to which all credit lending companies will report their transactions. These credit report bureaus are TransUnion, Experian, and Equifax. Although these bureaus seem to be the exact same, they may carry different information on their reports, therefore, it would be wise to request a credit report from each of them. To request a copy of your credit reports for free once a year, just call each of the credit bureaus and ask for a report to be delivered to your address. The information that you need to contact these bureaus is as follows:

Trans Union
P.O. Box 1000
Chester, PA 19022
(800) 916-8800

Experian (formerly TRW)
P.O. Box 2002
Allen, TX 75013
(888) 397-3742

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

Once you verify that you are the person you say that you are by giving some personal information to the customer service representative, you can ask to have a credit report delivered to your address. Then, all you have to do is wait until your credit reports arrive in the mail.

How To Find And Report Errors

When you receive your credit reports in the mail, you will see that they contain a lot of information about you. First off, make sure that all of the personal information is correct, such as the places you have lived and worked. Then, begin to verify that all of the charges that are listed on the report are charges that you have actually made. More than likely, all of them should be legitimate. If you do find a charge that is not one that you have made, then you have the option to dispute this charge with the credit bureaus. You can call back to the credit report bureau that contains the error and file a dispute with an operator there. The bureau will then contact the reporting agency that sent them the wrong information and investigate if it was actually you that made this charge. A lot of times, the reporting agency will remove the charge because they may not want to spend the recourses to hunt down the information needed to prove it was you. If they do the research, it can still be determined that you are not at fault and the charge will be removed in this case as well. If it is determined that you did make the charge, the dispute will be declined and remain on your credit report. You will need to go through all of these steps with each erroneous charge on all three bureaus’ reports. The more charges that are removed, the better your credit report will look.

The majority of credit bureau scores in the United States are produced by Fair Isaac and Company, or FICO®. The three major credit reporting agencies, or bureaus, are TransUnion, Equifax and Experian. They all provide FICO® Scores to lenders, and they all three use a slightly different formula to make their determination on what score will be given for your credit rating. All three could have identical information and the scoring system would be different.

However, most of the time they do not always end up having the same information in being able to determine your credit score. This is simply because not all businesses such as credit card companies, auto lenders, home mortgage companies, and various others will use the same agency to report any type of activity on your account.

There are specific factors that will influence the overall credit score. Issues such as your personal payment history on your accounts, any outstanding debts that you may have, the amount of credit you have versus what you have available, how long you have had each line of credit and very importantly, any derogatory or negative information that may be on your accounts. The frequency of late payments, any charge-offs or collections and a big factor is bankruptcies or credit repair companies you may have used.

There are also other factors that are weighed in determining your credit risk that do not have anything to do with your credit or any open accounts at all. Those factors are issues such as how long have you lived in your current home, how often do you move, or the length of time you have been at your job. It is never a good idea to change jobs right before applying for any type of credit, but especially so if it is a home or automobile loan. Lenders like stability.

Following a few simple steps can optimize your credit rating: be sure to always pay your bills on time or even before they are due, try to always ensure that you use 30% or less of the credit that is available to you, take the necessary precautions to always ensure that your good name is protected from the chances of identity theft. Protect your credit rating.