Understanding and Managing Your Credit Report

Regularly checking your credit reports is a crucial aspect of managing your personal finances. By reviewing your credit report, you can identify unexpected changes and discrepancies in each section and every account. If you notice any inaccuracies, you have the right to contact the company that reported the incorrect information and file a dispute with the appropriate credit bureau.

What to Review on Your Credit Report

Your credit report contains several sections, including personal information, accounts, and inquiries. The exact order and names of these sections can vary depending on where you obtained your credit report. Each section is important, even if the information doesn’t directly affect your credit scores. Here’s what to look for in each section:

Personal Information

Your personal information can include your name (including any nicknames or other names you previously used), year of birth, addresses and any address variations, phone numbers, employers that have been reported to the credit bureau, a spouse or co-applicant’s name, and a personal statement. Experian, for example, does not list your actual Social Security number for security reasons, but variations reported by your lenders will appear.

Unfamiliar names or addresses may indicate identity theft or credit fraud. Look for incorrect information that isn’t clearly the result of a typo.

Credit Accounts and Collections

The accounts section may be the longest part of your credit report. Look for accounts you don’t remember opening, collection accounts for bills you didn’t owe, incorrect credit limits, loan balances, or payment amounts on your accounts, the same account being reported as open in two different areas, accounts reported as closed when they’re open or open when they’re closed, and other errors in your accounts’ details.

Keep in mind that the balances on your report may not reflect the current balance on your accounts, as most lenders update balance information with the credit bureaus within their normal reporting cycle, typically once a month. Closed accounts can stay on your report for up to 10 years if the account was closed in good standing. Most negative marks fall off your credit report after seven years, regardless of whether the account is open or closed. Collection accounts can also stay on your report for seven years from the original delinquency date of the debt, even if you settle or pay off the debt.

Look for accounts you don’t recognize and incorrect information within your accounts.

Inquiries

An inquiry is a record of when your credit report is accessed by a person or organization (yourself included) that’s legally authorized to do so. There are two types of inquiries:

• Hard inquiries: Generally, these are the result of a business checking your credit report because you submitted a new application for credit or services. Hard inquiries can impact your credit scores and may stay on your credit reports for about two years.
• Soft inquiries: These can occur when you check your own credit or when a lender obtains your information as part of their preapproval screening. They may also result from companies you already do business with conducting periodic account reviews on their customers. Soft inquiries stay on your report for about two years but don’t affect your credit scores.

Pay attention to new hard inquiries, as they’re often the first step in opening a new credit account. An unexpected hard inquiry might indicate someone used your information to apply for a new account.

Look for hard inquiries that aren’t the result of an application you submitted.

Public Records

Bankruptcy is now the only public record that appears in a credit report. Chapter 7 bankruptcies can stay on your credit reports for up to 10 years from the filing date, while Chapter 13 bankruptcies can stay on your credit reports for up to seven years from the filing date. If you believe there is incorrect information listed in your public records section, you have the right to file a dispute with Experian.

Look for information regarding any bankruptcy filings.

Benefits of Checking Your Credit Report

Regularly checking your credit reports can be important for several reasons:

• You can learn what and when your creditors report to the bureaus.
• You’ll know when something important changes, such as when a negative mark gets removed from your credit history or a new account gets added.
• You can look for information you don’t recognize that could indicate identity theft or fraud.
• If you’re trying to improve your credit scores, knowing where you currently stand and what’s impacting your scores can also be helpful. Although there are many types of credit scores, most scores depend entirely on what’s in one of your credit reports. So, focusing on improving what’s in your credit could help all your scores over time.

How to Get Your Free Credit Report With Experian

You can get your FICO® Score☉ and credit report for free with an account from Experian. Your account comes with complimentary score and report tracking, with real-time notifications when there are important changes. Your account can also offer insights that you might not see elsewhere, such as an overview of the recent changes in your credit report and how they could affect your credit scores.

Changes in your credit report are often the result of normal activity, such as using your credit card, paying bills, and applying for new accounts. However, unexpected changes, like a name being added that you don’t recognize or a new account appearing when you didn’t apply for one, could be a result of fraud.

How to Dispute Inaccurate Information

You have the right to dispute errors in your credit reports for free, and you can generally open a dispute by mail, phone, or online. If the error appears on all three of your credit reports, you might want to send the dispute to the company reporting the erroneous information to the bureaus. Alternatively, you can file a dispute with each credit bureau directly.

If you want to dispute information in your Experian credit report, the online option could be the quickest and easiest:

1. Go to the Experian Dispute Center.
2. Click “Start a new dispute” to pull up your credit report and then find the information you want to dispute.
3. Select the account or information and then choose a reason for the dispute.
4. Review the dispute and click submit. You may have a chance to upload supporting documents to help with the investigation.

Once you submit a dispute, Experian will investigate the information—often by contacting the data furnisher that provided the disputed data. Credit bureaus generally take 30 to 45 days to investigate and resolve disputes, but it could take less time. Depending on the results of the investigation, Experian may correct, update, or delete information that can’t be verified or verify the information as accurate. Verified information can’t be removed from your credit report.

Use Free Monitoring to Spot Changes

Closely reviewing each of your credit reports can be important, and you may want to make it a regular practice. You can also use a credit monitoring service, such as Experian’s free credit monitoring, to keep an eye on your credit reports. If you receive an alert about an important change in your information, such as a new account or credit inquiry, you can then take a closer look at your report to investigate the change.

At O1ne Mortgage, we understand the importance of maintaining a healthy credit report. If you have any questions or need assistance with your mortgage needs, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you navigate the complexities of credit and mortgage services, ensuring you get the best possible outcomes for your financial future.