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Check Your Credit Report For Negative Entries |
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Inaccuracies are quite common in the credit reports and negative comments can arise as a result of these inaccuracies and errors. These negative observations can make a big difference in the interest rate you pay for mortgages, car loans and even your credit card balances. It is, therefore, advisable to check your credit report before you apply for a loan for a major purchase as it has been observed that nearly 70% of all credit reports contain at least one error. If you have not had any problems, it is enough to check your credit report from at least one of the credit-reporting agency (Equifax, Experian and Trans Union). How can you locate negative information in the report? You should first order a copy and check your credit report thoroughly. Preferably you should obtain credit reports from all the three credit reporting agencies (CRA) as there may be some variations in the files being maintained by these CRAs. Although this should be done at least once a year, it is wise to check at least one of your credit reports each six months as the crime of identity theft is on the rise. When your credit report is going to be used in making important decisions regarding applying for an automobile or home loan, renting an apartment, or applying for a job, you must check your credit report. This is necessary as you would not like to be shocked to find that your report contains negative information, especially if that information is inaccurate and as such you should order the report at least one to two months before you apply for credit or intend to rent. It is very essential to check your credit report to ensure that the creditor is giving correct entries to CRA as it is obligatory for the creditor to report only accurate, complete, and updated information to a CRA. The creditor must report accurately if you close an account voluntarily to distinguish it from an account that is closed for nonpayment. Moreover the creditor is obligated to put a notice of dispute in your file before reporting to the CRA, if you dispute the creditor's report of negative information. Normally if you sign an inquirer's authorization form that is too complicated and not easily understood, the creditor may provide documentation that you authorized a credit inquiry. In such a case you can write back and even threaten to contact the State Banking Commission and complain about a deceptive and unclear authorization form, if they don't remove your inquiry. Hence the importance of checking your credit report. If there are too many inquiries on your credit report, financial institutions judging creditworthiness will consider that as a negative factor. So, if you make several applications in the course of shopping around for credit, you should check credit report because credit reports list the inquiries that have been made for a consumer's report. The bankers also accept that number of inquiries on credit report is a factor in evaluating a credit application. Each time you make an application with a bank, a credit inquiry is made to a CRA. If you apply to 10 banks, your record will reflect 10 applications. This will give a warning signal to the next lender that you approach as to why you are making so many applications for credit. The lender might suspect that something is wrong and so you should check credit report for how many inquiries you made, as it can affect you negatively. You can be at a disadvantage in the market place also if you make too many credit inquiries, since the number of inquiries are a factor in computing a credit score. Obviously, your credit score will reduce, the more you shop around for credit. Looking for new credit indicates high risk but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. So, to get information about how many inquiries you have made, it's better to check credit report consistently. |
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