There is nothing better than reviewing your credit report and liking everything you see. This is sure to put your mind at ease from a financial perspective.
But what happens if something doesn’t look quite right? Should you take action or wait to see what happens?
As a general rule of thumb, if something looks out of place on your credit report there’s a good chance it is. And for that reason, you should contact the appropriate credit bureau (Equifax, Experian or TransUnion) to file a dispute.
Here are some of the credit report red flags that should raise suspicion:
1. Inaccurate Identity Information
In the identity section, everything should match information that pertains to you. No one else.
While you’re reviewing for these inaccuracies, check your Social Security number to ensure that it also checks out.
And when it comes to addresses, there shouldn’t be anything on the list that you don’t recognize. For example, if it says you’ve lived in Alaska for five years but have never even visited the state, that’s a problem.
2. Credit History Errors
As the years go by, your credit history will continue to grow. While you expect it to remain accurate, this doesn’t always happen.
Closely read through this section of your credit report to check for errors.
Do you see accounts that you never opened? How about late payments that you actually made on time? What about open accounts that are displayed as closed?
If you find that an account was opened without your consent, there’s a good chance you’ve been the victim of identity theft.
3. Public Record Errors
While this section isn’t typically as expansive as your credit history, it could include things such as a bankruptcy filing and tax liens.
You probably won’t find any errors here, but it could happen. It’s worth a closer look just to be sure. The last thing you need is a bankruptcy showing up in the public record section when you never filed.
4. Inquiry Permission
Hard credit inquiries can ding your credit score, so too many of these are a bad idea.
It’s okay to apply for a loan that’ll result in a hard inquiry, you just don’t want to do this too often. If you find a hard inquiry that you didn’t consent to, find out why.
Tip: hard inquiries will remain on your credit report for roughly two years. After that, they drop off and are never to be seen again.
Final Thoughts on Credit Report Red Flags
When was the last time you reviewed your credit report? Did you do so with these red flags in mind? Are you concerned that you overlooked something of importance?
There’s never a good time to sweep errors or suspicious information under the rug. Take the opposite approach by contacting the credit bureau, asking questions, and digging around for more information. You may be glad that you did.