Once a consumer is familiar with the components from a credit report that factor into a credit score, one of the first step steps to try and improve a credit score is to review the credit report for errors and inaccurate information. Credit reports are often filled with numerous errors however; most of these errors do not impact a credit score. The focus in reviewing the credit report is to have the accounts and records that impact the credit score repaired or removed.
When reviewing a credit report, keep in mind that a consumer has the right to contest inaccurate information…no matter how trivial that inaccuracy may be. Correcting the payment amount on a credit card will probably not impact your credit score but challenging the balance on a delinquent account may very well improve a credit score, not because the accurate amount will change the score but rather during the process of verifying the data the collection company may not get back to the credit reporting agency and the account will be removed simply because the consumer challenged the inaccuracy.
Credit reporting agencies are required by law to investigate mistakes and report back to the consumer disputing the report within a reasonable time frame, usually 30 days. The process generally involves the credit reporting agency requesting that the original creditor or collection agency verify the information supplied to the credit reporting agency. If the creditor cannot verify the data or does not respond, the account information is removed from the credit report. Clearly, one can see how the simple failure of the creditor to respond to the request can result in the account being removed.
It is therefore important for consumers to review their credit reports to look for inaccuracies almost regardless of the severity of the error. Information to review should concentrate on information about each trade line or account in the credit report. Each trade line or account listing provides the date the account was opened, whether the account is still open or now closed, the type of account, the account number or an abbreviation of the account number, the payment history, the credit limits and the existing balance.
These accounts should be reviewed closely for the following errors that may help improve the credit score:
Credit accounts that are not your accounts or cosigned accounts.
Delinquencies that are not yours, including any late payments and charge offs accounts.
Late payments, charge offs, or other negative entries other than a bankruptcy that are more than seven years old and will have passed the statue of limitations to remain as part of the credit report.
Derogatory or delinquent debts that your spouse incurred before marriage.
Any other incorrect account information, including debts that are reflecting a past due status when it was discharged in a bankruptcy filing.
If there are a number of incorrect entries or account information, you may want to make sure your credit records are not being corrupted because of identity theft.
You might find other errors in your credit report including inaccurate information about the date on closed accounts but date such as these and the majority of other data in the credit report has little impact on a credit score.
The key is to find the inaccurate information on accounts that when reflected correctly or removed altogether will improve your credit score. Challenging the credit reporting agency over inaccurate information is your right, often the results can be surprisingly positive resulting in a big boost to your credit score. And as long as the request to update or remove inaccurate information isn’t obviously a frivolous request, the credit reporting agency are required to respond. When someone tells you there is no such thing as credit repair that is just bunk.