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A credit report plays a paramount role when it comes to borrowing money from a direct lender at affordable interest rates. Any discrepancy in your credit file can have you in a category of a subprime borrower. Do not underestimate the importance of perusing your credit history.
You may not find it worth considering if you already have a bad credit score as you have no chance of escaping high interest rates, but being oblivious to an unidentified error can discourage you from applying for even loans for bad credit with no guarantor. Remember that a lender will never entertain your application if your creditworthiness is horribly doubtful.
Errors on your credit file can raise questions on your credit standing, and they can be much more common than you imagined. Of course, a credit reference agency records information of your default, missed payments, on-time payments given by your loan company. This information is used as a tool to determine how risky you are when it comes to paying off the debt.
A lender will always want their money back regardless of your credit history. Since they allow you to borrow money despite impaired credit score, it does not mean that they do not want it back. Even cheap short term loans for bad credit can be difficult to have signed off on if your credit report shows errors. Here are the steps you should follow to identify errors on your report and to have them rectified.
Lenders most commonly inform three major credit reference agencies – Eperian, Equifax and TransUnion - of your credit behaviour. These agencies maintain your credit report based on the information given by your lender that others go through to decide whether it is worth lending you money or not. Each agency allows you to have a look at your report once a year free without any impact on your credit score. So, do not treat it like a funny game. Each credit bureau follows different criteria to calculate your credit rating and therefore you can find slight difference. It is imperative that you understand them before reaching any conclusion. It is not surprising to see an error on one report and everything spick and span in the other two. This is why you should check all three.
Once you have got the report from all credit reference agencies, the next step is to check errors. Anything on your report mentioned inaccurate is an error. It can be anything such as wrong spelling of your name, incorrect residential address, a default that you did not make, pending payment that you have already made and the like. Such errors can seriously damage your credit score and whittle down the chances of getting the best deal at a lower interest rate. According to stats, one of four people has a discrepancy in the record of credit reference agencies.
When you go through your credit file, make sure that you read all information carefully. Check your name and residential address are accurately mentioned. Verify all open and closed accounts are correct and find out that it does not consist of a default that you do not identify. Most of the time, people are informed that their credit score is not fair and hence they cannot be approved for a loan. Do not be under the impression that your credit score cannot be poor even if you have successfully managed to settle your debts in the past.
Your report may show pending accounts that you have settled a long time ago or a default that you do not recognise, and review all hard inquiries to verify that they belong to your account.
If you find a mistake in the record of your credit file, contact to that particular credit reference agency by sending a letter or email requesting to delete it from your account. Then, the agency will contact the lender who provided data. The lender will verify and report it to the bureau, and then the agency will let you know what action they can take. You can also send a letter to your lender to give correct information to the credit reference agency. You do not need to admit fault as long as you know the discrepancy is not from your side. It usually takes not more than 30 days to resolve the issue.
Be aware of what is mentioned in your report if you want to have instalment loans for bad credit at competitive interest rates. Do not hesitate to dispute the error even if you feel it like a serious headache as it cannot be as intense as you feel after taking out a loan with high interest rates.
