Updated: Aug 31, 2022
March is National Credit Education Month! This month is all about learning the ins and outs of credit – what it can do for you, how you can use it, and the best way to look after your finances with it. Your credit report is a great place to begin when wanting to better understand your current credit position. Following are six of the key items that appear on a credit report, with tips on how to fix any errors you may find:
Is your name, Social Security number, address and other personal information accurate? If not, contact the credit reporting agency about the error. A lending company would be skeptical of making a loan to someone whose name and address (as listed in the credit report) are not consistent with the information provided to assess the loan.
The report will detail all of your open credit card accounts, highlighting your credit limits, whether you have been paying your bills on time and if there are any balances on the account. You should pay particular attention to the accuracy of this information because lenders use it to decide whether they’ll make a loan. Inaccuracies in this section are a major reason why many loans are rejected.
Credit reports also detail information on any mortgages you may have outstanding, any late payments, the account number of the loan and the date of mortgage origination. The same information is available for any other loans that you may have outstanding, including personal loans, home-equity loans, credit lines and other financing originated by a financial institution. It is absolutely essential that this information be correct. If a lender feels you have too much debt (even if the information is incorrect) the lender won’t approve you for another loan.
Credit reports will identify whether you have any accounts that are in collection and what the status of those cases is. Because this information can adversely impact your overall credit score and affect whether you are able to obtain a loan, it is important that it is correct. Credit reporting agencies often offer services that will help you resolve these issues or provide you with general advice and strategies on how to improve your credit score.