If you have ever used any credit, whether an installment loan, a credit card or a similar financial tool, you have a credit report. Three major credit bureaus issue credit reports for Illinois residents and all consumers who use credit in the United States. Consumers who periodically review their reports may find mistakes in them. What can you do about it?
What is in your credit report?
Your credit report provides a snapshot of how you manage your credit and deal with debt. The credit bureaus use an algorithm focused on your credit usage and history, resulting in a credit score. This information gives banks and other financial institutions an idea of your creditworthiness. Among the information you’ll find on your credit report are:
- Personal information
- Public information
Inaccuracies often occur in the accounts section, which contains information like open accounts, credit limits, monthly balances, and payment history, including late or missing payments. Late payments are just one type of negative mark against your credit. If they are accurate, you can’t remove them, but if they are inaccurate, a federal consumer law called the Fair Credit Reporting Act allows you to challenge the information and require the credit bureaus to remove the negative information if they can’t substantiate it, or correct inaccurate information that you can prove.
Credit repair can improve your financial life
While poor credit is generally a result of poor financial decisions, not all negative marks on your credit report may be your fault. Going through the credit repair process can help restore your financial standing when combined with learning how to manage loans and credit cards. Although consumers can do much of the work themselves, some may find the process long and complicated, especially if you have many negative remarks on your credit report.
The first step in repairing your credit is to pull your credit reports from Experian, Equifax and TransUnion and look for errors. Repairing your credit is essential as it can affect many areas of your life, from getting a job to finding a new place to live.