As you are probably aware, credit scores have a significant impact in your life. They can affect your eligibility to obtain a loan for a car, be approved for a rental or to purchase a new home. Unfortunately, all too many Americans have poor credit score ratings, and some of these ratings can be attributed to credit report errors. How exactly do these errors affect your credit score?
One of the major problems that could appear on your credit report is attribution of charges to you that you never actually made. As a result of these fraudulent charges, your credit score begins to sink lower and lower. Even though you never made the purchases, you are being held accountable for them. You should always check your monthly credit card bills to ensure that all of the purchases are legitimate. If you simply do not review the bills, then it is at least partially your fault if these charges make it to your report.
An error such as fraudulent charges is serious, but it might go unnoticed by you. As implied earlier, many people just pay their bills without paying attention to the source of the charges. A credit report is not something that is generally pulled on a regular basis, so a year could go by without your noticing the errors that have been made on it. This problem really opens the door to a lot of other issues. Since you are unable to constantly monitor your credit report, your scores can drop without your knowing about it.
Inaccurate credit reports can harm a person’s ability to secure a loan, as well as affect the interest rates they qualify for on loans they do obtain and can even affect employment prospects. Other harms, also called “adverse actions,” can include denial of insurance, housing, a lower credit limit, a decrease in credit limit, or an increased insurance rate.
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