subject: Good Credit score will help you when economy plummets [print this page] Good Credit score will help you when economy plummets
Credit score is one of those things which we tend not to appreciate until it's gone. It's easy to underestimate the importance of good credit history when stable job and savings create a sense of financial security, but what happens when disaster strikes and suddenly you find yourself struggling to pay the bills? In most cases remaining credit history should be enough to carry you through the difficult times and grant all the necessary credit. In some cases, however, credit score can turn bad even if you're not at fault and it's due to the errors on credit report.
Why would you have errors on your credit report?
The common misconception is that you're the only person who can wreck your credit report by letting unpaid bills pile up, but the truth is that it's not unusual for companies you're involved with financially, such as utility providers, to produce errors and accuse you of late payments and debts. This can go unnoticed for years until one day you decide to apply for say, a mortgage, and get rejected. On top of that. there's a whole industry built around improving credit score where in some cases the only thing required is having a read through your credit report and marking all the errors.
How do you know if errors are there?
Becoming rejected when applying for loans regardless of seemingly perfect financial standing is a good indication that report may contain errors. Just like has been mentioned before, you don't really have any other means accidentally discovering those and this can lead to major problems. First of all because repeatedly failing credit check lowers your score even more, and secondly because repairing inconsistencies on report may take months, which could be crucial if the loan applied for was meant to help you in time of crisis.
The second way of checking for errors on your report is of course requesting the report itself and reading through it. While most people imagine it to be a long and tedious task the truth is that ordering even the free version of report will take around 10 minutes and checking the whole document up to an hour. When compared to the stress and problems an unattended report may cause, it's time well invested. I find it most efficient to check my credit score once every three months.
What to do about the errors?
First of all, get in touch with the company responsible for error. They have a legal obligation to correct any untruthful claims but if they don't - the second call should be to the credit referencing companies which will look into the case and correct of for you.
