Applying for a mortgage can be an exciting and stressful time, but nothing is worse than realizing after you start the process that your credit report has errors on it that could make the process more difficult for you. Credit report errors occur for a number of reasons, but more matter why they happen they have a negative impact on your eligibility for any future credit. It's important to stay on top of your credit report to avoid any mistakes made by the creditors and credit bureaus.
Here are a few common reasons for credit report errors.
1. You applied for credit under several different names, such as John Doe and Jonathon Doe.
You may be making all your payments on time for creditors under John Doe, but if your legal name is under Jonathon, you may not be seeing any reflection. Applying for credit under multiple names can reflect on multiple credit reports and can lead to confusion on your credit score.
2. Someone made a clerical error in entering or reading information such as, names, social security numbers, or addresses.
This can happen if your name has been misspelled or a number on your address is missing. If your information is not correct it can affect on how your credit and payments are applied. This can also happen if you forget to update your information as life changes happen. Having correct and updated information is key for having a correct report.
3. Mix ups with common names. For example, John Smith might appear on another John Smith’s credit report as he applies for a mortgage.
This error can happen even if you are not intentionally a victim of credit fraud or stolen identity. If someone else with the same name gets on your credit report and they are not making/having late payments it can deeply affect you. Also, if you are on someone else’s making all your payments on time it would reflect on their score, not yours.
4. Being a victim of credit fraud.
People are victims of credit theft every day and many times it can go unnoticed for far too long. This can be a huge headache for you to deal with when it comes time to apply for a mortgage. Checking this on your credit report allows you to fix the information before it can become a bigger issue. It is also a good idea to set up alerts for when your credit gets pulled.
5. Loan or credit card payments were inadvertently applied to the wrong account.
You may have never missed a payment on an account, but if it is being applied towards the wrong account, it can reflect negatively on your credit report. It is always a good idea to go that extra step and check your balances to save yourself a huge hassle later.
No matter what the reason, the information could reflect poorly on your credit file, thus causing approval problems when the time comes to obtain a mortgage. If you find errors, no matter how small, be sure you get them fixed, and make sure that you contact all three credit bureaus with your change. And remember, we are always here to help you.