Errors on credit reports are more common than you think. In fact, according to a report from the Federal Trade Commission, one in five Americans has one. (You can read more about why errors appear on your credit report here.)
Given this proclivity, it’s a good idea to thoroughly check your credit reports for misinformation at least annually. You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and getting your credit scores for free each month on Credit.com. But while you’re going line by line, it’s important to recognize that some information may not be as inaccurate as you think. Here are a few items on your credit report that often look like errors, but might not be.
1. High Credit Card Balances
It’s possible for a high credit card balance to appear on your credit report, even if you ultimately paid it off in full that month. Issuers generally report card balances to the three major credit reporting agencies as of your statement’s billing date as opposed to its actual due date. So, if you see a high number, you may want to compare it to the one on your monthly bill before you dispute the information. Also remember you can keep high balances off of your report by paying your bill more frequently. You can also call your issuer and ask what day balances get reported so you can pay them down before that date rolls around each month.
2. Old Accounts
Don’t freak out if that credit card you closed out is still on your report when it comes time to do your annual credit check. Old accounts stay on credit reports for some time — typically about 10 years after the closure, if the account was in good standing, and seven if it wasn’t. And, if the account was in good standing, it could be helping your score. Most credit scoring models account for the age of your credit history when factoring your score. (You can find out more about how the age of your credit history is calculated here.)
3. An Account on Only One Credit Report
Not all creditors report to all three major credit reporting agencies, so if there’s an account appearing on your Experian account that isn’t on your TransUnion or Equifax versions, you’ll need to do some digging. It could be an error, of course, but it also might be a collections account (like an unpaid medical bill) you weren’t aware of and that collector only reports to one bureau. You can help determine whether you owe by contacting the creditor, who should be listed somewhere on the credit report in question.
Remember, once you’ve established that an item is inaccurate, you can dispute it with the credit bureaus. You may also want to dispute the information with the creditor who is reporting the error. You can find more about disputing errors on your credit report here. If you have lots of errors on your credit report or don’t want to deal with the dispute process, you can also hire a credit repair company to help for a fee.
More on Credit Reports & Credit Scores:
- What’s a Good Credit Score?
- How to Get Your Free Annual Credit Report
- How Do I Dispute an Error on My Credit Report?