There’s a 20% chance that at least one of the credit bureaus has incorrect data about you — and you wouldn’t even know it if you don’t check your credit reports.
That was among the findings of a Federal Trade Commission study of the effectiveness of the Fair Credit Reporting Act — it spanned 2004 to 2012 and was done at Congress’ request.
The study found that one quarter of consumers identified errors on things that might impact their credit scores.
Mistakes Corrected
Four out of five consumers who disputed anything in their credit report had a modification made, and just over one in 10 saw an improvement in their credit score after the disputed error was fixed, according to the FTC.
Although about 79% of those who challenged errors succeeded in getting a modification, one in 250 consumers were able to enjoy a 100 point improvement in their FICO credit score following a correction.
However, the more profound changes don’t result from a single dispute filing but from also following up afterward.
Some Partial Corrections
Additionally, as many as half of the disputes only achieve partial corrections, which you would only know from checking back.
It really is in your best interest to dispute anything that looks erroneous on your credit reports, and to keep following up.
But in order to do that, you need to get into the habit of checking them in the first place. You owe it to yourself to obtain a free credit score on a regular basis — and checking it yourself doesn’t have a negative effect on your score.
What Happens When You Don’t Check Your Credit Reports
Actually, not looking at your credit report periodically can be detrimental — or rather you’ll miss spotting the first signs of a potential identity theft or any kind of negative developments that push down your score.
You also miss the mistakes that lower your credit rating erroneously: the FTC study noted that people with errors on their credit reports also tend to have lower scores.
The most critical errors that you want to correct on your credit report are inconsistencies, according to Credit Sesame.
- If you have a commonly occurring name, your records can be mixed up with those of someone else with a similar name.
- You might also spot outdated information or incorrect balance amounts on any of your accounts, due to time delays in reporting.
- Other areas to focus on include references to collections agencies, public court judgments, and accounts that have been handed over to collections agencies.
Getting into the habit of checking your credit reports, disputing mistakes and practicing good debt habits will help you improve your credit scores so you can qualify for more and better financial products.
Read More About Credit Scores
If you’re interested in learning more about credit scores, we have a massive archive of articles on the topic — here’s just a selection:
- 5 Things That Can Damage Your Credit Score
- Master Your Financial Future: How to Take Control of Your Credit Score and Improve Your Profile
- Starting Credit Score: A Guide to Your Most Important Score
- Getting a Fix on Your Finances: Deciphering a Good and Bad Credit Score
- How to Properly Use Credit Cards to Increase Your Credit Score
- Increase Your Credit Score by Increasing Your Credit Limit
- Keep Your Credit Score High And Reap These Benefits
- Surprising Ways to Damage Your Credit Score
- These Simple Tips Can Help You Rebuild Your Credit Score
- Want To Get Your Credit Score To 800+?
- How To Build Your Credit Score The Right Way
- Fix Your Credit Score Quickly With These Simple Tips
- Fix Bad Credit Fast With These Simple Tips
- Rebuild Your Credit Score With These Easy Actions
- Boost Your Credit Score With These Quick Tips
- Some Easy Ways To Ruin Your Credit Score
- Different Ways That an Excellent Credit Score Can Improve Your Life
- Increase Your Credit Score With These Simple Tips
- Credit Score Myths That Will Cost You
- This Is Why It’s Important To Check Your Credit Score
- The Consequences of Having a Bad Credit Score
- Great Ways To Kill Your Credit Score
- How To Estimate Your Credit Score
- Want To Destroy Your Credit Score? Make These Credit Card Mistakes
- Closing Accounts Can Affect Your Credit Score
- Interested In Improving Your Credit Score?
- A New Credit Score That Includes More Financial Factors
- Fast Ways To Kill Your Credit Score
- Are Poor Credit Scores Stopping us from Shopping?
- Clearing Up the Credit Score Confusion
- How to Properly Manage Your Credit Score
- Easy Ways To Repair A Bad Credit Score
- Looking for a New Job? Get That Credit Score Up
- Settling Debts for Less — Bad Deal for Credit Scores
- The Truth About Credit Scores
- Three Ways Credit Scores Are Used Against You
- How to Increase Your Credit Score for a Better Rate
- How to Negotiate With Debt Collectors to Eliminate Old Debt and Raise Your Credit Score
- How to Raise Your Credit Score by 150 Points or More in the Next 30 Days
- How to Raise Your Credit Score with Your Unused Credit Cards
- How to Get Your Credit Score for Free Without the BS
Jackie Cohen is an award winning financial journalist turned turned financial advisor obsessed with climate change risk, data and business. Jackie holds a B.A. Degree from Macalester College and an M.A. in English from Claremont Graduate University.