A Quick and Easy How-To for Fixing Credit Report Errors

A Quick and Easy How-To for Fixing Credit Report Errors

If you’re in the market for a new or used car, getting an auto loan is probably on your mind. Most consumers don’t have enough cash in the bank to pay for what they want in a vehicle outright, which makes financing a necessity. However, getting a car loan is more than simply filling out an application and waiting for the funds to arrive. A review of your credit report and score is required, and that can mean some unexpected bumps along the car loan road.

Although you can get an auto loan no matter how good or bad your credit may be, better credit scores typically lead to better loan rates. When creditors see that you pay other creditors on time, treat credit limits responsibly, and have few negative marks like a bankruptcy or repossession, you’ll have a greater chance of scoring a lower interest rate—which can save you hundreds or even thousands of dollars over the lifetime of your loan.

While it may come as no surprise that great credit works in your favor when applying for a loan, many car buyers are shocked to discover that one of the most common issues with an individual’s credit isn’t due to a poor track record of financial mismanagement, but rather errors made by creditors or credit reporting agencies!

In order to ensure you’re getting a fair interest rate on your auto loan, follow these tips for finding and fixing any credit report errors that could be affecting your score.

How to Check for Credit Report Errors

Mistakes on your credit report can happen for several reasons, but it’s often a simple clerical error that takes place when account information like credit limits, late payments, or defaults are pulled into one of the three credit bureaus (Equifax, Experian, and TransUnion). The easiest way to check for errors is to pull your own credit report from each of the credit reporting agencies and review it in depth. Through AnnualCreditReport.com, all consumers have access to their credit report at no cost, once every 12 months. If you’ve already taken this step in the last year but are planning to get a new car loan soon, you can instead request a copy of your credit report directly from each of the three credit bureaus for a small fee.

Once you have your copies in hand, go through each item closely, looking for mistakes in the details.

Common Credit Report Errors

Looking at your credit report can be a bit overwhelming at first, given the amount of information listed. Generally speaking, your credit report will include everything from personal details to specific loans for lenders to review. You can expect your credit report to cover your:

  • Full name
  • Social security number
  • Previous names or aliases
  • Past and present employer information
  • Address history
  • Dates of any account openings and closings
  • Credit limits, minimum monthly payments, and balances on current lines of credit
  • Details on student loans, personal and auto loans, mortgages, credit cards, and other lines of credit
  • Inquiries from lenders
  • Other public records

This is, of course, a lot of information, but when reviewing these details, remember that errors can take place anywhere. From a typo in your name or address to incorrect credit limits or late payment information, even small inaccurate details can hurt your overall financial picture.

Unless you take the time to review each of the sections of your credit report closely and uncover errors that could potentially harm your credit profile, any new lender will see and trust what’s in black and white. This could affect your ability to get a new loan or drastically increase the cost of borrowing in the future. Make a note of what’s incorrect in your report, then follow the steps below to correct the issues as soon as possible.

How to Fix Credit Report Errors

When a credit bureau has made a mistake, you have the right to dispute the error with each agency. Whether it’s a payment that wasn’t applied or negative marks that are from several years ago, you can request to have the information removed. First, though, it’s important to gather any information you may have about the error, including documentation backing up your claim, such as confirmation of payment on a credit account. Once you’re ready, you have the option to dispute a credit error either in writing or online.

Equifax, Experian, and TransUnion all have online error dispute platforms that are intuitive to use and easy to track. With each credit bureau, you’ll simply find the credit dispute link on their website and click. Once you’re in the right place, you can fill out the online form detailing which entry is erroneous and why it is incorrect, then attach any documentation you may have to back up your claim. After submitting, the credit bureaus will research the dispute and make necessary changes to your report if an error is indeed found.

Before you go through this dispute process, remember that not all negative information listed on a credit report is an error. If you did miss a payment, file for bankruptcy, or have a vehicle repossessed in the last seven years, those negative marks are meant to show potential creditors that you may be a higher risk than the guy or gal without similar entries on their credit report. Don’t waste your time disputing items that are true, as that won’t improve your credit report or score.

Credit bureaus have 30 days to respond to disputes made in writing or online, so make your disputes at least a month before applying for your auto loan. If you haven’t heard anything after one month, check the status of the dispute online or call the credit bureau to inquire. Should an error not be removed within the 30-day window, you can take your issue to a regulatory agency, like the Consumer Financial Protection Bureau or the Federal Trade Commission.

Pulling credit files, reviewing the information for errors, and disputing those mistakes with credit bureaus can take time—but the benefits are well worth the effort. If you’re able to identify and ultimately remove incorrect information found on your credit report, you’re more likely to boost your credit score and strengthen your credit report to ultimately secure more affordable financing for your next car.