With a copy of your credit report(s), you can uncover the errors that lower your credit score, or make you appear to be a credit risk to potential creditors. These items can be disputed or negotiated with creditors or collection agencies for removal from or changes to your credit file.

If negative credit items that lower your credit score are accurate, you may not be able to get them deleted or altered in your credit file. In the least, you can attempt a dispute, as failure to validate any account, whether valid or otherwise, results in required deletion by the CRAs (see “Credit Reporting Error Resolution Process”).

If there is a lot of the negative reporting in your credit file, it is a sign that you need to improve your credit management behavior (see “Understanding Credit” or “Starting Over: How to Redevelop Credit”). If there are seriously delinquent accounts reported that you are unable to pay, there is a bigger problem than just errors to your credit report lowering your credit score, and you may need to consider options for debt relief before entering into the long process of disputes and negotiations of errors in your credit file. Besides, the errors contained in a credit report from only one CRA provides so much frustration during the resolution process that is worth tackling more serious financial issues first.

However, if you have been developing and managing your credit wisely or redeveloping it for some time, and have not seen rewards by way of your credit score, be sure to search for errors in credit reporting. Any small error is cause for dispute with the CRA with which the credit report originates.

Keep in mind that all current or past credit accounts can remain in your credit file for up to 7 years; bankruptcies or other serious items can remain for 10 years or more. If there accounts still being reported after this period, they are in your credit file erroneously, and should be deleted.

Also review personal information, and other items that are not are not factors in credit scoring. Even if they are not calculated into your credit score (for instance, residential history or jobs), some items will be judged by lenders in deciding your credit risk (see “Your Credit Report” for more information).

You would want to look for incorrect items within each account reported. A mistakenly reported late payment in one account can have severe effects on credit scoring (see “Items That Affect Your Credit Score”). An incorrect high balance in a credit card account also carries weight in credit score calculations. All of these are errors that should be corrected in your credit file. Additionally, closed accounts with incorrect payment or balance history should be corrected.

Even credit accounts that should be reported, but do not appear on your report are considered errors. This is especially true for those who are establishing or redeveloping credit, but the good account history is not evident in their report.



References:

iGlobalFinancial.com. 2004 Consumer Credit Templates.

Federal Trade Commission. Facts for Consumers: Building a Better Credit Report.

NeighborWorks America. Realizing the American Dream: A Manual for Homebuyers, 3rd Edition.