Red Flags to Look For on Your Credit Report

One of the most important financial documents that you have is your credit report.  While all people have the right to receive a copy of their credit report for free each year from each of the three major credit bureaus, most people do not know how to read the report.  When reviewing your credit report, there are several red flags that you should look out for, which will help you to get the best credit score possible, protect your identity, and avoid fraud.

 

Unfamiliar Accounts

When you are reviewing your credit report, the first red flag that you need to look out for are unfamiliar accounts.  If you have a long credit history, there could easily be twenty current and historical accounts on your report.  While it may be cumbersome to do so, it is important that you confirm that each of those accounts is a legitimate account that you opened in your name.  If the account is not something that you opened, it could either be a mistake made by the creditor or evidence of a fraudulent account being opened in your name.  Regardless of what the cause is, you need to contact the creditor immediately to start the process of having the account removed.

 

Accounts in Good Standing that are not Reported

While it is important to review your report for accounts that are not accurate, you also need to review the report to ensure that all of your actual credit and loan accounts are reported.  If you have a loan or credit card that you have a long and positive history with, having the information on your report will improve your score.  If you notice that one of these accounts is not reported, the missing information is effectively lowering your score.  It would be a good idea to contact the creditor immediately to ensure that the account is reported correctly going forward.

 

Incorrect Personal Information

The third item that you need to look out for when reviewing your credit report is whether all of your personal information has been reported correctly.  Your credit report will include a lot of personal information including your full name, address, prior addresses, and social security number.  If any of this information is incorrect on the report, it could cause an issue when you go to apply for a loan in the future.  Because of this, it is important that you start working with the credit reporting agencies to ensure all of your personal information is reported accurately.