Credit Report Errors and Their Impact on Your Credit Score

Orland Copeland
September 15, 2023
Credit Repair

A credit report is a big deal for first-time homebuyers in the US. It is a statement detailing data on your credit activity and current credit situation. So, you’ll usually find information such as your:

  • Personal information
  • Credit history
  • Credit inquiries
  • Public records
  • Personal statements

Lenders and creditors in the US consider your credit report when deciding whether to offer you credit or loans. In addition, it often determines the terms of such credit facilities.

Credit Report Errors

Unfortunately, credit reports are often fraught with several errors. A study of nearly 6,000 volunteers showed that one-third of them had mistakes on their credit reports. Furthermore, 10% of the respondents found it difficult to access their credit reports.

Notably, there are two crucial types of credit report errors. They include:

  • Personal Information Errors
  • Account Information Errors

Personal information mistakes usually include wrong addresses or names. Similarly, the report can consist of a misspelled name. Account data errors also involve:

  • Payments wrongly reported as late
  • Payments wrongly reported as missed
  • Unrecognized debt reported to collections
  • Unrecognized accounts

How Credit Report Errors Affect Your Credit Score

Credit report mistakes wouldn’t mean much if they don’t adversely affect your credit score. Your credit score is based on the contents of your credit report. Essentially, your credit score is a number that ranks your credit risk.

Lenders, banks, and credit card companies use your credit score to determine the possibility of you repaying your debts. In addition, the score helps them know if you’re a credit risk. So, a high credit score makes it easier to:

  • Get loans
  • Rent an apartment
  • Negotiate lower insurance rates

Sadly, credit report errors will lower your credit score. Consequently, first-time homeowners can suffer:

  • Higher home insurance premiums
  • High home mortgage interest rates
  • Denial of loans and credit offers

All these disadvantages can make you lose thousands of dollars. Notably, the worse the error, the more money you lose. For example, the money you could have used for your new home may get tied up in higher interest rates. Therefore, you should pay attention to your credit reports.

Fixing Credit Report Errors

Many people don’t demand their credit reports until they need to apply for credit for their new homes. Then, when they finally do, they aren’t careful enough to check for any errors. Instead, they submit the credit reports to the lender or other financial institution.

However, it’ll be best to evaluate your credit report regularly. Under the Fair Credit Reporting Act, you can request your credit report from credit reporting agencies. They include:

  • Experian
  • TransUnion
  • Equifax

Notably, you can request these credit reports every 12 months. If you discover any errors,  you can dispute the mistakes with the credit reporting agencies. You can also pursue a complaint with the organization that supplied the wrong information to the credit reporting agency.

NueCred’s Credit Repair Services Can Help You!

Noticing errors in your credit report is one thing. However, correcting such errors is another issue, and it’s often challenging. Fortunately, Nuecred has a repair service that can quickly help you fix inaccurate information. So, reach out to us today.