If you’re considering applying for a mortgage, you probably already know the important role credit scores play in determining your application’s status. Over the last few months I’ve detailed ways to not only improve your score, but to begin the process of saving for your down payment. This week, however, I’ll go over the steps that can be taken to clean up your credit report so that your score isn’t affected by possible reporting mistakes.
While it’s incredibly important to pull your credit report before you make a large purchase, waiting until you’re on the cusp of a large financial commitment can actually backfire. According to research studies, over 75% of reports generally contain some sort of inaccuracy, which means you’ll need some extra time if you want these errors sorted out in advance. To get ahead, begin by going over your credit report now and make a point to check it for accuracy on a regular basis.
To start, after ordering your report (which you can do once every 12 months from each of the three major reporting agencies—Equifax, Experian, and TransUnion), look over your identification basics. Although seemingly innocuous, you’ll not only want to verify your social security number, but you’ll also want to take note of any credit cards or lenders who have you listed under a nickname instead of your birth name.
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From there, scan your report for any discrepancies such as accounts you don’t recognize or loans with a higher balance than you’re currently carrying. Since these types of inconsistencies may signal a case of mistaken identity or identity theft, it’s important to address them as soon as possible.
If you come across any of these errors, your first step is to contact the bureau providing the report (all three have online dispute forms) to make them aware of the issue. Since they already have resolution processes in place, they will provide you with a determination about your claim within 1-2 weeks; however, if they are unable to remedy the situation, you can attempt to work directly through the lender.
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After you’ve submitted your dispute, don’t be afraid to follow up. It would be wonderful if you could simply refute a portion of your report and forget about it, but that’s simply not the case. When contacting someone to get more information about your case, make a point to keep a record of who you spoke with, when, and why. Since all three reporting agencies communicate with one another electronically, a correction on one report will often be made on the remaining two.
In the end, maintaining an accurate credit report is simply about being organized and vigilant. While most people pay close attention to their actual score, the number isn’t nearly as important as making sure that what is contained within the report is accurate and up-to-date.
