Your credit score plays a significant role in your financial life, influencing everything from the rate of interest on loans to the approval of credit cards. Incidentally, mistakes on your credit report can lead to an inaccurate credit score.
So, here are five credit report errors you should be aware of in order to maintain a good credit score.
1. Late Payments on Your Credit Report:
Late payments can have a lasting effect on your credit score even if the delay is minor. It can impact your chances of getting a loan at a favourable rate of interest.
These mistakes happen when a payment is reported as late due to administrative hold-ups or inaccurate information in the lender’s files.
2. Duplicate Entries on the Same Credit Account
A loan may appear twice when it is transferred from one lender to another, once under the previous lender, and another under the new one.
This can lead to a higher total debt and negatively affect your credit score.
As such, it's important to keep a track on your credit report after refinancing or switching lenders to make sure that your debt isn't included twice, as this could seriously affect your credit score.
3. Identity Mistakes in Your Report
At times, your credit report might include accounts that actually belong to someone else due to similar personal information.
Also, these identification confusions might lower your credit score. If you spot unfamiliar accounts on your credit report, investigate and resolve the issue with the credit bureau to protect your credit score. Correcting any mistaken identity errors is key to keeping your credit report accurate and prevent unnecessary damage to your credit score.
4. Incorrect Personal Information
The credit report may contain wrong personal information, such as misspelled names, incorrect addresses, or incorrect Permanent Account Number (PAN). These may appear insignificant, but they could confuse lenders or credit bureaus which could make it more difficult for you to obtain credit. Regularly reviewing your data can help your report stay accurate.
5. Unauthorised Accounts or Transactions
Your credit score may suffer if you have fraudulent transactions or inaccurate accounts which can be signs of identity theft or lender errors. It's essential to regularly review your credit report in order to identify any accounts or activities that are not yours. Notify the credit bureau right away if you discover any disparities. If you take quick action, you will be able to maintain your credit report.
