Having damaged credit can limit your purchasing options. However, when it comes to repairing your credit there are plenty of ways to accomplish that. One of the most effective ways is to guarantee the information on your credit report is accurate. Credit reporting agencies have taken on a monumental task; it is not surprising that mistakes are fairly common. Common mistakes include reporting other peoples credit on your report and including information that should have been removed.
There are three main credit-reporting agencies. These are Equifax, Experian, and TransUnion. Each of them operates and maintains their own database of credit information and records, and each of them gathers information from different sources. Because of this there is a very good chance that mistakes will appear on your credit report and will affect your credit rating. There is simply too much data being entered by too many different people for mistakes to be completely avoided.
On comparing reports from each of the three reporting agencies you will see three different credit scores. A distinct disparity between FICO scores indicates that there is probably a mistake on your credit report that needs to be resolved.
Your three credit scores determine the terms under which you may borrow money; indeed even your ability to borrow is affected by them. Though lending rules differ, it is fairly common for lenders to make decisions based on the median score. If you wish to improve your credit score then simply getting your credit report is not enough. It is important to request all three reports so you can look at each line of the reports looking for mistakes that need to be rectified.
Bear in mind that a mistake may not be an entire entry in of itself, but it might involve the amount of money involved, the time when the debt was reported, or the final disposition of the debt. This is why the line-by-line review is a good idea. You may see an entry regarding a debt you did in fact pay late on, but it might not have been reported at the appropriate time (a common measure taken to keep items on your credit report longer than they should be) or for an incorrect amount.
Also, keep in mind that new information is being added to your report on a regular basis. Therefore inspecting your credit report for mistakes is not a one time event, but should be undertaken on a regular basis. Once a year, or about nine months before you intend to apply for a major loan, are the usual recommendations for inspecting your credit report for errors.
Wendy Polisi is the founder of Credit Repair College and Finance the Dream. Their video training is designed to allow consumers to take control of their financial future by learning the insider secrets of credit repair. For more information on credit repair, please visit them on the web. Finance the Dream helps people looking for a rent to own homes take advantage of the $8,000 tax credit.