Common Credit Errors
Common Credit Errors
Once you have familiarized yourself with the contents of your credit reports it is time to start identifying and dealing with the “low hanging fruit”. Experience shows that certain common credit errors occur far too frequently in the same predictable areas of credit reports. Fortunately most of these type of common credit errors are rather easy to correct. To make some fast easy credit scoring gains you need to begin your credit improvement campaign with special scrutiny looking for the following common credit errors:
- Incorrect or misspelled name and addresses past and present. Try to be consistent in your use of any suffix that may apply such as Jr., Sr, Maiden name, resumption of maiden name, the IId, the IIId
- Unauthorized hard inquiries. Do not worry about harmless unauthorized soft inquiries. Soft inquiries do not affect your score in any way.
- Illegal re-aging (incorrect date of first delinquency).
- Reported credit limits that are lower than the true credit limit.
- Incorrect balances owed
- Late payments that were paid on time.
- Duplicate collection accounts… especially accounts listed as both collections and charge offs.
- Paid accounts still showing a balance.
- Credit lines not listed.
- Debts of a stranger with a similar name especially if you have an unusual name.
The credit reporting agency’s online system for objections is tempting but don’t bite. We will not be using an online shortcut for filing objections. Filing objections online involves waiving certain legal rights. These rights must be preserved in case we need to appeal the credit reporting agency’s adverse decision against us to the federal overseer, the Consumer Financial Protection Bureau (CFPB).
Honest Errors Happen
Correcting any of these common errors will be beneficial to your score. Many times the mistake is the result of an honest error somewhere along the line. Vigilance by consumers in the digital age is more necessary than ever. You need to be learning the most effective ways to clean the common credit errors from your reports. More sophisticated ways to help your score include adding positive entries, adding different types of credit and increasing your available credit while reducing debt. Roll up your sleeves and take charge of the situation.
Inquiries are sometimes given too much weight in credit improvement campaigns. Hard inquiries only affect your score for one year even though they are listed for two years. One or two hard inquiries has only a negligible effect. Refrain from looking for unnecessary new credit. New credit can also adversely affect your age of credit accounts.
Debt Settlement Services are never a good idea for anyone. All these debt settlement companies do is hold onto your monthly payments to their service in hopes of settling for less than the full amount several years later.. In the meantime your credit gets worse and worse. They do nothing for you that you can’t do for yourself. For instance you can stop collection calls with your own “cease and desist” letter to the collector. If you demand in writing that the collectors stop calling they have to stop. Consider this warning from the official literature of a major debt collecting company:
“The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest.”
The above quote is the words of a major debt settlement company, not mine. I can’t think of a single situation where a debtor improves their standing by utilizing the services of a debt settlement company.