Did you know that mistakes, errors, and inaccuracies within your credit reports can cost you financially if you’re not aware of them early on? It is suggested that over 79% of consumers credit reports contain serious errors resulting in denial of credit. Many inaccuracies may be a result of simple human error while others may be due to more severe cases, such as identity theft. Most people only order their credit reports once a year. Yet, mistakes on your credit reports can happen all throughout a twelve month period. If only ordered once a year, those mistakes could catch you unaware and may hinder you from making major purchases.
That’s why it’s imperative to gain access to all three credit reports at minimum – every three to six months – for review of accuracy and/or errors.
Signing up for those “free” online advertisements to provide continual access and credit monitoring of your credit reports may not necessarily be a bad thing. Just don’t rely on those free services to provide you a complete and comprehensive mechanism for identity theft or credit restorative services. Adopting this one small habit of consistency can help reduce the amount of errors being reported. Most creditors may not alert you of their mistakes. However, when a creditor or credit bureau is notified by the consumer of an error – they must correct and/or remove those items reporting inaccurately. Federal law mandates the consumer’s right to a free credit report annually from each credit reporting agency, but not to a free credit score.
The Federal Trade Commission better known as the “FTC” governs many state and federal laws that protect consumers and insures the completeness and accuracy of credit and debt practices.
These laws do not guarantee credit approval to consumers. However, they are in place and require creditors to provide consumers a fair and equal opportunity to receive credit and resolve disputes over credit errors.
The Fair Credit Reporting Act (FCRA) is one of the most notable rights in place to protect consumers. This act was passed in 1970 regulating the collection of credit information and the access to credit reports.
The FCRA ensures to promote the accuracy, fairness and privacy of personal information within the files of credit bureaus/credit reporting agencies. In addition, the FCRA protects consumers by requiring credit bureaus/credit reporting agencies to adopt “reasonable procedures” regarding confidentiality, accuracy and proper use of consumer’s credit information. Per the FCRA, a consumer has the right to personally dispute incomplete or inaccurate information within their credit reports. However, there are times when the extra help by a professional credit expert may advance the disputing process.