The biggest news this week revolved around a piece on “60 Minutes” about a Federal Trade Commission report on the accuracy of credit reports.
Credit.com’s Director of Consumer Education Gerri Detweiler took a look at the FTC report, which found that one in five consumers have errors on their credit reports.
However, Detweiler notes that other studies that have been done on credit reporting errors show that even though the “one in five” stat is pretty scary, the errors are not necessarily ones that would hurt your chances at getting a loan. The FTC reported that errors in the data on header information comprised the third most common category of alleged mistakes in their study. What’s important is staying vigilant about your credit report accuracy by getting your free annual credit report from each of the three major three credit bureaus.
Once you’ve pulled your credit report, you may find that you do have an error on that report. Don’t freak out just yet. There is a dispute process set up by the major credit bureaus that will help you work through getting the error erased from your report, and there are consumer protections in place to make sure your dispute is resolved quickly.
One of the biggest mistakes consumers make is disputing the error with the wrong party. Credit bureaus get their data from what they call “furnishers.” A furnisher can be your mortgage lender, a car financer or a credit card company.
Eventually, any account that is in dispute but has not been resolved in 30 days has to be removed from your credit report, a default protection put in place to ensure consumers aren’t negatively affected by information that is out of their control.
Personal finance sites (even us!) love to talk about some of the absolutes of the financial world. This article turns those “absolutes” on their head and gives consumers some tips for thinking unconventionally about money.
One of our favorites is their examination of the “debt snowball” method popularized by Dave Ramsey. Even though there are tons of consumers who have used this method of paying the smallest account balance first to successfully reduce their debt, the most cost-efficient way of digging though your debt is to tackle high-interest accounts first.
Image: NS Newsflash, via Flickr