Your credit score helps you to understand how the lenders look at you when you apply for a loan or a credit card. Your credit report has all the information on your existing loans, your repayment patterns and also if any defaults made in the repayment process. This information is held for six years and is updated every month. It is always suggested to check your free credit score rating in regular intervals so that you are up to date with you score. There are a lot of factors which influences your credit score and is important to understand them, how they work, how are the ratings given and how to maintain the same.
There are a lot of instances where you will find your credit score to be inaccurate. You won't have any idea about it until you are opting for a loan or a credit card and the lender informs you about the same. If you find yourself stuck in such a situation, then you are in big trouble and you will need to take immediate action to report the credit report error. This can be a big hurdle on your loan process and your loan may not get sanctioned because of this reason. When you report the error to the credit bureaus it will be a lengthy process and depends from bureaus to bureaus.
We will sight you four reasons why your credit score looks wrong and you will need to take immediate action on the same,
As stated earlier your lenders and credit card companies send a report every month on whether you made the payment on time for that particular month. In some instances the information provided by the lender to credit bureaus is wrong. The lenders sometimes mix up the files while submitting the report to the credit bureau and that leads to a bad credit score. You can report this instance to the bureau and they can start an investigation, but it is hard to keep track of the same. In any case you will have to follow up your case until the mistake is edited.
If you find an error in your report which is certainly not your mistake and after inquiring with the bank, if they it's not them either then it is probably the credit bureau’s error who is collecting your financial data. They collect data in billons and despite of having great software in place they are also tend to make such mistakes. If you find the source of mistake and if that’s a credit bureau you can immediately raise a dispute with the bureau. When you raise a dispute with the bureau make sure you have all the proofs attached stating it’s not your fault and neither the banks so the process speeds up a little.
If the above reasons do not justify your credit sore not being what you expected, then are a victim of identity theft. Identity theft is when someone else takes your information and uses it to buy things and makes you pay for it. If the transactions are made under your name, it will be shown on your report. You will have to be very careful in such instances and if you find yourself in such situation, you should report it to the authorities on priority. Many victims do not know they are targeted from a very long time. An identity theft will make you a loan defaulter and will give you a hard time while getting a loan in desperate times.
This can be the last reason and you will not have to worry if such thing happens. Sometimes the lender delays sending report and thus the credit score is not updated. In such cases the lender can consider giving loans if the updates are pending as every entry is recorded.
It is suggested to check the credit report frequently even if you do not want to take a loan. This will give you a clear idea on your financial status and also give you a heads up way before time if any mistakes noticed.