How much is your credit score costing you?
It’s always important to keep an eye on your credit score, whether you’re in the market for a new mortgage or not. Not only does regular monitoring alert you to potential identity theft, but it will also allow you to deal with any potential credit errors before the eleventh hour.
According to this infographic by Canadian lender Xceed, the most common credit reporting error is a Tradelines (or Consumer Reports) error. This is a negative item on your report that, while it may be yours, features some sort of mistake – like the incorrect number of days a payment is late, incorrect balance or missing account information. If the information is wrong, you can dispute it – and if the credit bureau is unable to verify the information within 30 days, the entry has to be removed from your credit file.
Other ways mistakes can find their way onto your credit report is if you have a hard-to-spell last name or a name that changed after you were married. This can lead to confusion among creditors — and increases the possibility that someone else’s missed payments will find their way onto your report. Occasionally, collections agencies also fail to report when a collection has been paid in full – and the mark on your credit report continues to bring your score down.
If you spot an error on your credit report, it’s important to dispute it in writing to either (or both) of Canada’s two credit bureaus – TransUnion and Equifax. A low credit score can cost you thousands when it comes to your mortgage, primarily because the best rates are reserved for those with a good score. Once you fix any outstanding errors – or pay off outstanding debts – you’ll be amazed at how quickly your score can improve.