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Lying in bed unable to sleep because of credit report errors

Written for Credit One Bank by Experian Written for Credit One Bank by Experian

Your credit reports are like report cards on how you’re doing with your credit. Potential lenders rely on them to get an accurate picture of your credit behavior in order to make more informed decisions on extending you credit.

While credit reporting agencies strive to make their reports as accurate as possible, sometimes they can contain errors and inaccuracies, which you don’t want to ignore. The information in your credit reports can have a domino effect on your future financial options, so it’s important to make sure they are accurate and error-free.

Here are three good reasons you’ll want to dispute any erroneous information in your credit report.

 

Reason #1: Inaccurate Information Could Affect the Credit You’re Offered

 Inaccurate information in your credit report—especially if it’s derogatory—can paint a less-than-flattering picture of your credit history to potential creditors, which could prevent you from obtaining credit with favorable terms or keep you from getting credit altogether.

Derogatory information, whether it’s true or not, can lower your credit score and make you look higher risk to lenders. This may translate into being denied credit or, if you are extended credit, could result in higher interest rates and less favorable terms, which could end up costing you thousands of dollars over the course of your lifetime.  

 

Reason #2: Inaccurate Information Could Affect Your Employment Situation

When employers are narrowing down their list of candidates for a job opportunity, they will oftentimes look at the candidates’ credit reports. Why? Because responsible credit behavior can be a good indicator of how a candidate will perform on the job. It may also predict how a candidate will manage an employer’s finances and other resources. 

While an employer may view a modified version of your credit report—but only with your written authorization—they may not look at your credit score. However, if your credit reports are riddled with derogatory information, most potential employers will be able to make the leap that your credit score, which is derived from your credit reports, is probably not great either.

Given all of this, you may want to review your credit reports before applying for your next job. The good news is you are entitled to a free credit report from each of the three major credit reporting agencies—Experian®, TransUnion®, and Equifax®—every year. To request your free credit reports, visit annualcreditreport.com.

 

Reason #3: Inaccurate Information Could Affect Where You Live

If you’re applying for a mortgage, potential lenders will almost certainly check your credit scores and credit reports, so you’re going to want your reports to be as accurate as possible. But did you know that, if you’re trying to rent a place, landlords often check your credit score to decide if you qualify as a reliable tenant who will make consistent, on-time rent payments? 

So, before applying for a home loan or to rent a place, do what you can to maximize your credit score and make sure there are no errors in your credit reports that could lower your score. Disputing errors on your credit report is free, and Experian recommends disputing inaccuracies on your Experian credit report online for faster results. Once Experian receives your dispute, we check the source of the inaccurate information to investigate the error and report the resolution back to you.

Back to the original question posed in the title: Should you worry about credit report errors? There’s no reason to lose sleep over inaccurate information, particularly since you can take action to dispute any inaccuracies and hopefully rectify them. But you should at least be concerned enough about errors to take the necessary actions to get them corrected.

Doing so could open up credit, employment, and housing opportunities that might not otherwise be possible. It could also potentially save you thousands of dollars over your lifetime.   

 

The information contained in this article is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation. Please understand that Experian policies change over time. Articles reflect Experian policy at the time of writing. While maintained for your information, archived articles may not reflect current Experian policy. 




This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.


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