Credit Reporting Issues

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    • Your credit score is the most important factor in determining your eligibility to open new lines of credit, secure a home loan and purchase a new car. You are entitled to view your credit score for free once per year. It's important you conduct a thorough inspection of the material found in the report to eliminate any fraudulent accounts or payment errors. Fixing these problems early can significantly improve your credit score.

    Fraudulent Accounts on Credit Report

    • An error on your credit report, such as a credit card account you didn't open, can adversely affect your credit score, which may make it difficult for you to secure new lines of credit. These errors can happen by accident. For example, if you have the same name as a close relative and a Social Security number was not used to open the account, the account can erroneously appear on your credit report. Fraudulent accounts may also be the result of identity theft if a person has obtained your personal information and used it to open accounts in your name. In either case, it's important you inform the credit reporting bureau in writing of the fraudulent account as soon as you discover it.

    Timely Payment Errors

    • A credit card company may accidentally report your timely accounts as late to any of the three credit reporting bureaus. If the error is not caught, it can remain on your credit report for at least seven years and continually effect your ability to secure new credit and lower interest rates on existing accounts. Appealing to the credit reporting bureau in writing and including date-stamped evidence of payment, such as a bank statement, is the best method of correcting this credit reporting issue.

    Credit Report Inquiries

    • Applying for multiple credit accounts in a short period of time can worsen your credit score, according to the National Association of Realtors. This is because the credit reporting bureaus consider these inquiries as a warning sign of a potential account delinquency. Inquiries are considered in 12-month windows so it's important to keep unnecessary credit inquiries low and avoid large purchases within the same calender year.

    Lowering Available Credit

    • Credit card companies may respond to excessive inquiries into your credit report and increased use of available credit by lowering your credit limits. According to the National Association of Realtors, 14 percent of consumers in 2009 experienced a reduction in revolving available credit. The credit score of those who experienced a drop in available credit dropped by 20 to 40 points.

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