Costly Credit Errors

When is the last time you checked your credit report? You should do it once a year because if there's an error it could end up costing you plenty.
There are some 13-million inaccuracies on credit reports every year. It can start with a simple mistake. Maxine Rubin says a credit-card payment she made was not accurately recorded.

Rubin, credit customer, says "I wrote them a check for $180. And I got the next bill saying that I didn't pay $180 and I said, "Yes I did." And they said, "No, you didn't, you only paid $100."

Maxine did, in fact, make a $180 payment. Before the matter was cleared up, she was charged a string of penalty fees and even lost credit lines for her business.

Consumer Reports says any number of things can result in an error on your credit report, so it's worthwhile checking your information once a year.

Jeffrey Blyskal, Consumer Reports, says "If there's a mistake that lowers your credit rating, you could end up paying a higher interest rate on a mortgage or auto loan. That could cost you hundreds or even thousands of dollars over time."

If you do find an error on your credit report, Consumer Reports says you need to dispute it with all three credit bureaus, Equifax, Transunion and Experian. "Because they don't all share the same information, and you want to be sure they all have the correct information" says Blyskal. If you have a credit dispute, it's important to put it in writing, and send a letter instead of an e-mail. You'll want to send it return receipt requested. Also, be sure to send a copy of your dispute directly to the creditor, as well as to the three credit reporting bureaus.

And Consumer Reports says, unfortunately, once you think you've fixed an error a government survey shows 13% of the time it ends up reappearing.

"So we recommend that you go back three or four months later, check your credit report to make sure that hasn't happened" says Blyskal.

And be aware, federal law now entitles everyone to one free copy of their credit report, once a year, from each of the three credit bureaus.