The Cost of a Credit Report Error
Credit report errors are all too common, and many times if they are small errors, you may just let it go, not know about it, or you may not know how to dispute the credit report error. In any case, one small credit report error could have serious consequences for your financial future.
Importance of Your Credit Score
Credit Report errors can have a serious effect on your credit score. Your credit score is a number created by credit reporting agencies that is put together based on the information found in your credit reports. The most commonly used credit score is your FICO score. This score is used by lenders, banks, credit card companies etc. in order to determine the likelihood that you will repay your debt. It gives them an idea of how risky of an investment it would be to do business with you. FICO credit scores range from 300 – 850. The higher the score, the better; it shows that you are lower risk to lenders.
Errors on Your Credit Report Can Cost You Thousands
An error on your credit report can lower your credit score. A low credit score can be damaging and hurt you in many ways, including:
Much higher credit card interest rates
Higher home and car insurance premiums
Higher home mortgage interest rates
It can affect your U.S. government clearance
Higher private student loan interest rates
Loss of a job opportunity
Denial of loan and credit offers
Each of these instances alone can cost you thousands and some potentially tens of thousands! Don’t throw your money away. Make sure that you check your credit reports for errors and get them fixed right away. Though credit scores are generally not free, you do have the right to request your score from credit reporting agencies. The three national credit bureaus, Experian, TransUnion, and Equifax, may each have a different credit score and credit report for you, since they all use their own databases, so it may be a good idea to request copies from all three. Under the FCRA you are entitled to request and obtain a free credit report from each credit reporting agency every 12 months.
