I learned a huge lesson recently about the importance of knowing your credit score when I went to purchase a new car. I hadn’t checked my score in months, but I thought to myself with confidence it would be a great score since I always pay my bills on time. When my father and I sat down with the financial director he gave us an absolutely obscene interest rate, and then looked at my father and said, “Have you seen her credit score?”
I was shocked, although it wasn’t incredibly low, the score had dropped immensely and I couldn’t figure out why. I examined the credit report closely and noticed two huge mistakes that were supposed to have been fixed months prior. With a few phone calls and lots of persuading I got the right interest rate, but that could have all been avoided if I would have checked my credit report before hand.
I’m sure you’re all aware that having good credit is valuable, especially in this declining economy. When you have good credit you are able to get loans approved, buy cars, own homes, and so forth.
According to the credit bureau an estimated 50 to 70 percent of information found on the majority of credit reports is either incorrect or outdated. Although credit bureaus collect the information, they are not required to check for accuracy.
The Washington Post recommends the following tips for checking your credit report:
• Order your credit report from each of the three major credit bureaus – Equifax, TransUnion, and Experian. Three credit bureaus means three different credit reports.
• Check each one carefully. The credit bureaus don’t always report the same information.
• Make a different folder for each credit report. Staying organized will make the process much easier.
• Be patient and thorough. Highlight any mistakes you find. Even one error can cause you to be denied credit in the future.
• Highlight any information that looks suspicious or unfamiliar. Remember, you are also checking for signs of identity theft.
• Check all dates very carefully. Even negative information can be removed if it is out of date.
• Make sure the accounts listed actually are yours.
• Take your time. Work on your credit reports a little at a time in order to minimize frustration.
How Long Can Information Stay On Your Credit Report
Accounts in good standing: 10 years
Late or missed payments: 7 years
Collections: 7 years
Judgments: 7 years
Bankruptcies: 10 years
Credit inquiries: 2 years
Tax liens: indefinite
How Can You Obtain Your Credit Report?
Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
Equifax.com
TransUnion
P.O. Box 2000
Chester, PA 19022
1-800-888-4213
TransUnion.com
Experian
P.O. Box 9556
Allen, TX 75013
1-888-EXPERIAN
Experian.com
Remember, your credit is your future!
-Mia
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This was very helpful, thanks!