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Credit Repair And The Art Of Finding Errors

Apr 9, 2008
Every Error Counts

Credit reporting errors can ruin your credit scores and cost you money. It is essential that you examine your reports periodically to spot these errors. But do you know what to look for? A nationally recognized credit repair expert has some information that may surprise you.

The Invisible Threat

Are you aware of the errors on your credit report? Do you know what to look for? Most people are under the impression that the information on their reports is correct if it looks familiar. Unfortunately, a cursory glance through your reports in search of unfamiliar information is virtually guaranteed to miss a significant number of errors. Effective credit repair requires a thoughtful and informed effort and should not be taken lightly. Over 100 million Americans have errors on their credit reports serious enough to cause them to pay premium interest rates on every dollar they borrow. The cost of credit reporting errors can be significant. Can you afford to throw money away unnecessarily?

Looking Under the Hood

Have you ever had car trouble and lifted the hood to locate the problem? Unless you are a mechanic you probably didn't achieve much. The first step in the credit repair process is the search for credit reporting errors, and it's a lot like lifting the hood of your car. You might spot something, but your chances are better if you know what to look for.

Two Types of Errors

Credit reporting errors may be grouped into two general categories; obvious errors, and compliance errors. Obvious errors, such as accounts that don't belong to you are easy to find. Compliance errors generally relate to a real event, but should not report as a matter of law. These may not look like errors at all, but anyone familiar with the nuts and bolts of credit repair knows they make up the vast majority of erroneous reporting.

Collection Issues

Because compliance errors relate to a recognizable event usually means that they go unchallenged, and needlessly damage your credit scores for years. Collection accounts often fall into this category. Collections are often sold and re-sold. Collectors who no longer own a debt may not report the collection on your report. A shocking number of reported collections have no legal right to show on your report. And yet, the system provides no mechanism or incentive for collectors to cease reporting when they should. Here's a handy credit repair fact: collections change hands regularly and should be challenged even when they look current.

Reporting Period Violations

Reporting period violations are also in the category of compliance errors and often go unchallenged. Most derogatory information should stop showing on your report after seven years. People starting a credit repair effort are usually aware of this fact, but an impressive number of these errors escape notice. Creditors are responsible for furnishing the credit bureaus with accurate start dates for these reporting periods. Unfortunately, creditors do not always provide the proper dates, and may even inadvertently reset the start dates under certain circumstances. Did you know that the reporting period starts with the original default and cannot be reset by subsequent debt holders? If an account is charged off and sold to a collector, and eventually a sequence of collectors, the likelihood of a reporting period error increases exponentially and the damaging information may report for years past the proper expiration date.

Those Darn Credit Cards

The relationship between your credit card balance and the high credit limit can have an enormous impact on your score. Did you know that it is common for credit card issuers to misreport high credit limits? The affect on your credit scores can be dramatic. If you have a credit card with a $1,000 balance and a $10,000 limit, and the creditor were to erroneously report your card with a $1,000 limit - just equal to your current balance - your score could fall significantly. How much will it fall? Many consumers involved in a credit repair effort are confused about the effect of a derogatory item on their credit score. Did you know that the impact of an error on your score will vary depending on the overall content of your report? The more credit you have, and the older your accounts are, the less impact a single problem will have. On the other hand, if your credit is relatively lean, a single error can be devastating. In either case, it is worth examining your report carefully to insure your high credit limits are correct.

Déjà Vu Credit

Have you ever examined your report and seen the same account more than once? You're not alone. Duplicate accounts occur all the time and impact your scores exactly the same as if they are real, additional debt on your report. Another common error of a similar nature involve closed accounts which continue to report as open with balances. Like too many other types of errors, these are often passed over with a shrug during a credit repair effort, but may be costing you money.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
About the Author
Jim Kemish, a nationally recognized credit repair expert, is the president of Sky Blue Credit, a leading credit repair business since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company.
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