One in Four Credit Reports Have Wrong Information

Stressed businessmanYour BBB® informs callers and web visitors daily on how to get free annual credit reports.

Creditors, employers, banks and others use credit report information when making financial decisions. Lenders believe someone’s credit report gives the best indication of whether that person will be able to repay a loan. Credit reports are produced by credit reporting agencies (credit bureaus); whose numbers don’t always agree.

Credit bureaus use different formulas to determine credit scores, the numbers that indicate our credit worthiness. The most widely used model is the Fair Isaac Corporation (FICO) score, ranging from a low of 300 to a high of 850. Consumers need to check their credit report frequently to make sure errors or omissions do not negatively affect their credit rating or score because as many as one-quarter of all credit reports may have errors or incomplete info.

There are three major credit reporting agencies: Equifax, Experian and Trans Union. The law allows consumers a free credit report from each of them every year. Request one in January, another in May and a third in September — or another four-month rotation — to keep a constant check on your report status. Order your free report online at AnnualCreditReport.com, by phone at 877-322-8228 or by writing to Annual Credit Report Request Service, PO Box 105281, Atlanta GA 30348-5281.

AnnualCreditReport.com also contains links to guides that contain tips on improving your credit. Some of the tips include:

-Pay loans on or before the due date.

-Set up automatic payment or payment reminders to be sure you’re current.

-Limit yourself to three or fewer credit cards.

-Limit card balances to no more than one-third of your credit limit.

-Try to keep your oldest credit card accounts indefinitely, if annual fees are favorable.

-Reduce debt on other loans as much as possible.

The guides offer some cautions, one involving co-signing for a loan. You’ll go through the same credit check as the primary borrower; if that person can’t keep up with the payments, a delinquency will appear on your credit report. You’ll then be responsible to repay the loan, and your ability to get new credit could suffer. Another caution involves credit repair. People may promise to “fix” your credit if you pay up-front fees, tell them your account number and bank’s routing number or wire cash; all signs of potential fraud. Trust your instincts and just say no.

For more information you can trust, visit bbb.org/evansville.

While the BBB endeavors to provide accurate information to the public, changes in the law, facts or circumstances may have occurred since the foregoing was posted. The BBB recommends doing independent research and consulting professional advisors concerning a particular situation.

About Michael 224 Articles
Michael is our Business Information Specialist and will be writing at least one article per week for the consumer education blog. He works with accredited businesses to ensure we maintain current contact information and licensing. He is usually first to answer the phone; so odds are good you will be speaking with him when calling our office.

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