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Is it possible to correct credit report errors?

Jodie Humphries avatar
Jodie Humphries
- 5 min read
Is it possible to correct credit report errors?

A poor credit score or incorrectly listed information on your credit report could impact the loans you apply for. While it’s not that common, it is possible for your credit report to contain mistakes. 

For instance, you may find a debt of a family member or someone with a similar name to yours listed on your file. Or, there may be an incorrect default listed on your file due to a processing error on the bill collector’s behalf. This may happen if you use third-party services to pay bills. 

Other examples include a credit reporting agency forgetting to remove a default from your file that has run its course (defaults only stay on your file for five years) or somebody using your identity to apply for loans and utility services.

How to fix errors on your credit report?

The easiest way to keep your credit report error-free is by checking it regularly for errors. You can request a free copy of your credit report from each of the three main credit reporting bodies – Equifax, Illion and Experian, once every year. You may also request a free copy of your credit report if some information has been corrected or you were refused credit in the last 90 days.

Once you receive your credit report, read it thoroughly to check whether all the loans and debts listed on your credit report are actually yours. If yes, you should confirm whether the listed amounts are correct. 

It’s also important to go through the defaults listed on your report. A default could appear on your file if you have a debt of $150 or more, which is overdue by 60 days. A creditor must also inform you in writing before listing a debt as a default. Once a default is listed on your file, but you eventually pay it off, it should reflect as a paid default, which is again something you should keep an eye out for.

If you think there’s a mistake on your credit report, you can ask to have it changed for free by contacting the respective credit reporting agency. Here are some steps you can take to fix errors on your credit report:

Simple tips to boost your credit score

Checking your credit score regularly can help you keep a tab on your financial health. If you find your credit score unusually low, it could indicate a mistake on your credit report. But if you find all the information on your file to be correct and your score is still low, it could help to analyse your financial behaviour to figure out the reason behind a low score. 

At the same time, you can do some simple things to improve your credit score gradually, such as:

  • Automate your repayments
    Setting up automated payments can help you avoid an unintentionally missed payment and protect your credit score. Late payments can pull down your credit score, especially if you tend to forget your payment dates frequently. You can set up a direct debit with your credit provider or set a recurring reminder on your phone to eliminate this situation. This will help you make your payments on time by relying on something more than your memory and help protect your credit score. 

  • Pay more than the minimum amount due on your credit card
    It’s tempting to pay the minimum repayment amount on your credit card each month and move on. However, have you ever wondered what this does to your financial health in the long run?

    Paying the minimum amount due on your credit card will not hurt your credit score, but you’ll accrue significant interest charges over time as your balance owing isn’t getting reduced. On the other hand, paying just a little more than the minimum repayment amount can help you pay off your debt faster, which not only looks good on your credit report but also reduces your risk of defaulting on a payment in future.

  • Avoid multiple credit applications
    It’s advisable to avoid making multiple loan applications in a short period. Each credit application you make (and its result) appears on your credit history, which could make you appear credit hungry or unreliable to future lenders.

    If you are applying for a credit product, it’s worth doing your due diligence to ensure you meet the eligibility criteria for the product to avoid having your application rejected. For instance, if you are applying for a home loan, you could start by using an online calculator to check your borrowing capacity so that you only apply for a loan amount that’s serviceable to reduce your risk of being rejected.

    In case your application for a credit card or loan gets rejected, it may help to wait it out for some time and fix the reason for rejection (such as a low credit score or incomplete documentation) than applying for another credit product immediately without finding out why you were rejected in the first place.

  • Pay your existing debts on time to build your credit score
    If you have a home loan or use a credit card regularly, make sure you make all your payments on time to demonstrate positive financial behaviour. Since the introduction of the comprehensive credit reporting system, both positive and negative information is listed on your credit file, which means using credit responsibly could help build your credit score. As mentioned previously, it’s also important to check your credit report regularly for any errors that may have crept into it and might be pulling your score down.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.