If you don’t check your credit report annually, you should. Most consumers know that but all too often it’s put on the back burner. Some might think there’s little reason to check credit because most have a pretty good idea on their credit profile. Someone makes a purchase with a credit card and when the bill arrives, the payment is made. Pretty simple stuff. However, credit reports are known to have reporting errors. This is probably due to the way credit is collected and reported. There are three main credit repositories, Equifax, Experian and TransUnion. Individual businesses can subscribe to one, two or all three. These businesses report payment patterns to these vast databases who then provide this information to others who request a credit history of an individual applicant. If there’s a reporting error, it’s listed as a late payment and when one of the three receive such information it’s transferred to the other two. If a mistake lies relatively dormant without the consumer checking for these errors, credit scores will falter.
After requesting a free copy of a credit report once per year, review the report and look for such mistakes. If you do find a mistake, you can then contact each individual credit bureau and request the mistake be fixed. You will be asked to provide evidence the payment was not late, or the account does not belong to you or some other reason. The bureaus then have 30 days in which to correct the error. This of course assumes the bureaus work in a timely manner and respond appropriately. Many times, they do not, which extends the period of time how long the mistake appears on your report.
Further, damaged credit can be the result of an event out of the consumer’s control such as a divorce, or death in the family or an extended illness. This can often result in not just damaged credit but ultimately a bankruptcy filing. Credit repair companies can, and do, charge a fee to consumers to help get their credit back on track. This can mean a complete evaluation of the consumer’s current credit standing and then work with the consumer with repayment plans or negotiate with the creditor to get the negative items corrected or even removed.
Yet the easiest and most cost-effective way to get credit reports fixed is working with your loan officer. One of the very first things a loan officer will do when a loan application is submitted is to order a credit report. But the loan officer doesn’t contact Experian, Equifax or TransUnion directly, instead working with a credit agency directly. Credit agencies hire representatives to solicit business from individual loan officers and mortgage companies. When a credit report needs some attention, the loan officer contacts the individual customer service representative for some help. When an error is found, the consumer simply forwards the substantiating evidence to the loan officer who then provides it to the representative. When a mistake is found, the error can be fixed in as little as 24 hours, not 30 days.
A loan officer can’t change lending guidelines such as how long someone must wait to get a new mortgage after a bankruptcy or foreclosure for example, but getting mistakes fixed quickly is one thing a loan officer can do.