3 Common Credit ... - Credit and Personal Finance Blog | Credit Karma

September 8th, 2011

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Let?s face it ? everyone makes mistakes, and credit bureaus are no exception. The numbers vary, but it?s reported that anywhere between 3 and 25 percent of credit reports contain an error. These errors often go overlooked, and can hurt your credit score.

Pulling your credit reports from each of the three major credit bureaus and checking them for errors is an easy first step towards better financial health. By going through each item on your credit report, you may find errors that can be corrected, which can boost your credit score.

Here are the most common errors to look out for when reviewing your credit report.

Outdated personal information

The three credit bureaus (Experian, Equifax, and TransUnion) each have their own database. This means that your basic contact information, including your name and address, can vary between the three. If you have changed your name or recently moved, it?s a good idea to make sure that your information is up to date at all three bureaus. This will cut down on any confusion when you apply for credit in the future.

Mistaken or fraudulent accounts

After checking your basic information, it?s a good idea to count the total number of accounts listed on your credit report. A mix-up in credit files can create confusion between you and someone who lives at the same address or has a similar name as you. This can cause an account to be accidentally placed on your record. Along with mistaken identity, theft is also a major concern. Knowing how many open accounts you currently have reduces the likelihood of having credit cards open fraudulently in your name.

Incorrect account details

Aside from the number of accounts on your credit report, be conscious of the specific information for each account. Clerical errors can mislabel the type of an account on your record, which can negatively impact your score. For example, a home equity line of credit should be labeled as such, and not merely a line of credit. Having a good mix of credit will improve your score, but only if your accounts are reported correctly. The same can be said for your credit limits, which is a crucial part of calculating your credit card utilization. If the credit bureau is reporting your credit card limits as too high or too low, this can possibly impact your credit score.

What does it all mean?

Now that we?ve covered the most common errors, check out this helpful post with instructions on how to dispute an error on your credit report. Being aware of these types of errors can help you proactively spot them on your credit report, and start you down the path to improved credit health.

Give credit where credit is due,

Danielle Belfatto, Karma Contributor

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Source: http://blog.creditkarma.com/credit-scores/credit-report/3-common-credit-report-errors/

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