4/7/06

Mistakes Can Lower FICO Credit Score


Did you ever wonder why errors show up on your credit report?


According to MyFICO.com, errors in a person's credit report might mean their file is incomplete, contains information about another person, or any number of reasons:


Sometimes it's a simple credit report error like transposing numbers in a social Security number.


Sometimes it's a different name. A woman gets divorced, then remarries. A man applies for a credit card using an informal name ("Pete" instead of "Peter," etc.)


Sometimes a clerical error is made. A hand-written application might be illegible by the person typing the information into a computer system.


Sometimes a bank will be bought out, and credit information appears in both records (this has happened to me for a truck I had financed at a local bank that was later bought out by a national firm).


Sometimes payments were applied to the wrong account. Without checking your credit report, you'd never know that there was a late charge a year ago on an account.


Sometimes accounts you THOUGHT you had closed out and stopped making payments on actually are still open and are showing late fees.


Having credit report errors will not prevent you from getting credit. But errors -- whether they are your fault or not -- could effectively lower your FICO credit score. Having a low FICO credit score, in turn, could mean that you'll be paying more for refinancing your mortgage or getting a home equity loan at favorable terms.


Our suggestion: Get your free credit reports from AnnualCreditReport.com and check them over for accuracy. Also, take action and follow the free tips we've assembled at FindHow2.com to fix your own credit and improve your credit report.

Your credit score is a reflection of your own personal credit history, it is not etched in stone. Take action to improve your credit score, and you'll see your FICO credit score start to rise and the interest you'll be offered on future loans begin to drop!

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