Although the number of free online financial literacy resources skyrocketed in the recent years, most consumers today still don’t fully understand what role a credit score plays in their everyday life.

Credit score is one of the main parameters used in determining your credit worthiness. Poor credit history (IE: late payments, negative public records) can not only make your borrowing rather expensive, but in certain cases prohibit any borrowing at all (where judgements/collections are present).

Keeping a good credit profile doesn’t only help with borrowing money. Credit history has become an important due diligence item for landlords/employers and even other businesses when entering into a new agreement. Banks, mortgage lenders, auto dealerships, telecommunication companies all check your credit history and score before approving for any of their services. Some would argue that it may have never been more important to understand how to correct your records when the appropriate corrections are due.

Many of the readers don’t know this, but accuracy of your credit report is your own responsibility. Both Equifax and TransUnion work off of whatever information is provided to them on a monthly basis by your creditors. If such information happens to have errors (which it often does), these errors can stay unnoticed on your report for years. Some negative records (ie: judgements/collections) can also prohibit almost all meaningful credit score recovery. Such derogatory records almost nullify any positive impact good repayment history could have had on your score (until corrected/removed).

Luckily, you have the right to dispute any information on your credit report directly with the Credit Bureua Agency. We recommend checking your credit reports with both Equifax and TransUnion at least twice a year to ensure accuracy.

Watch out for any of the below:

• Mistakes in your personal info (name, birth date and mailing address)
• Credit card payment errors (where a payment was made but not recorded)
• Collections
• Judgements
• Accounts that do not belong to you
• Accounts that were ‘Closed’ still showing as ‘Open’
• Inquiries that you never consented to

Did you know that both Equifax and TransUnion offer online dispute portals in case you wish to correct any of your credit bureau records?

Check out these Pocket Mortgage Instructional PDFs on how to be effective when disputing/updating your records with both Equifax and TransUnion!

• Download Equifax Credit Report Updating Instructional PDF
• Download Trans Union Report Updating Instructional PDF

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Author: Komalpreet Kaur, Mortgage Agent with Pocket Mortgage Lic#13032