Debt Free

By now most people are pretty well aware that one of the most important things you con do to protect your personal financial health, and help yourself along the road to debt freedom, is to get a copy of their credit report and thoroughly look it over. Some mistakes on the report will jump right out at you, such as “Hey, I never financed a new Bentley Azure in 2003!!” Others however, are a bit more subtle, yet can give you credit problems you don’t deserve. Still other mistakes aren’t found on your report at all. Therein lies the problem. The average American today has 13 credit obligations at any one time. There is ample opportunity, with that many simultaneous accounts, for problems and mistakes to crop up.

What are some of these common credit mistakes that can conspire to sabotage your pristine credit score? Glad you asked; here they are, actually in no particular order:

(These are not to be confused with things you can do to actively ruin your credit score on your own, like pay bills late, or default on your mortgage.)

Credit Report Mistake #1 – Using different names when applying for credit.
An example of this would be if you applied for credit under both Mike and Michael. This can cause some of your credit to be missed and not be counted. If you are paying bills late or otherwise neglecting your obligations, this may not be such a bad thing, but for those of you with great credit, you want a large, well documented credit history with lots of “pays as agreed” notations on it. Be consistent.

Credit Report Mistake #2 – Credit report has information about the wrong person.
As crazy as it sounds, your credit report may actually contain someone else’s information. This may get easily missed, especially of you’ve got a fairly thick report. All this information is entered by a human somewhere and it’s definitely not unheard of for either social security numbers to be inaccurate or some letters of a name to be incorrect. You could be Bob S. Miller, and have report information about a loan to Bob D. Miller or Rob Miller on your report. If your handwriting is uh, not what it should be, or you’re practicing to be a physician, it’s not much of a stretch to see how someone could misread your information.
 
Credit Report Mistake #3 – Payments are applied to the wrong account.
Another mistake is made when loan or credit card payments find their way into the wrong account. This can easily happen when you have multiple accounts with the same lender. Your payment for the account that ends in 4994 is mistakenly applied to the account that ends in 4995 or 9449. If you normally pay extra on your accounts, you may not notice the mistake because you never get behind enough in your payments to trigger a notice from your bank.

These kinds of credit report mistakes can go undetected, yet can slow down loan applications and cause you to pay a higher interest rate on credit than you’re eligible for.