It’s Your Credit Score – Protect It!

Want to hear a brain teaser? What’s something that is with you everywhere you go, affects most of what you do, but you don’t often see it? Give up? It’s your credit score. That’s right, your credit score is a part of nearly every aspect of your adult life, from where you get to live, what kind of car you drive, the cost of your auto insurance, and even what you choose as a career. Having a good credit score can determine a lot about your life, so it’s crucial to protect it -- especially now during a pandemic when credit reporting errors are on the rise.

You might be shocked to learn that COVID-19 can have such an impact on your credit report and score. Pandemic-related actions, like the government-backed student loan and mortgage forbearance and foreclosure moratorium, are in place to help people struggling to pay their bills. Unfortunately, the volume of impacted borrowers strains the system and can potentially lead to an influx of credit reporting errors. 

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We can’t place all of the blame on COVID. There are many reasons why your credit may be impacted by reporting errors that range from a typo during a credit inquiry all the way up to identity theft. You may even be surprised to learn that your name may increase your risk of credit reporting errors. How? If you have a junior, senior or similar designation, you will more than likely see something on your credit report that belongs to one of your relations.

You might think that once something has been reported to the credit report that there is nothing you can do about it. Fortunately, that is not the case at all. It is important to act when you notice a discrepancy because those errors can have the potential of dropping your score – significantly! You know the saying, “If you see something, say something?” If you notice an error, an inquiry you don’t recognize, a tradeline or an account opened in your name, or something you don’t recognize, your best bet is to file a dispute directly with the credit bureaus. Notice that I said specifically bureaus, not bureau. The three credit agencies, Equifax, Experian, and TransUnion, usually have the same information, but there are periodic discrepancies. If you see something suspicious on one bureau’s report, file a dispute across all three to protect yourself! The credit bureau will do an investigation and address your concerns. If they determine that there are errors, each will correct them for their bureau.

Be sure to follow up regularly because some errors may be recurring, and you don’t want those slipping through the cracks. In other cases, the bureaus may determine that there are no errors. In this case, contact your creditor directly and discuss the situation directly with them. You may be able to come to a resolution that can deaden the impact on your score. Regardless of the outcome, you can always have a personal statement included on your report that creditors will see during inquiries.

It’s been a while since I have quoted my former boss, so here it goes. “Proper planning prevents poor performance.” The saying also applies to your credit. If you know that you plan to purchase a home or auto, be proactive. Pull your report ahead of time so you can address any issues BEFORE they come to light during a credit inquiry. This will make your financial transaction go smoothly and prevent delays. After all, you don’t want to miss out in today’s competitive market! Here’s another bonus to checking your report regularly – you can catch identity theft early. That’s worth the extra time in my book.

If you are reading this, I hope you have followed my earlier advice to stagger the retrieval of your credit reports to maximize your free annual credit report. Don’t forget that there is an extended service that allows you to pull your report each week for free. If you have not already done so, stop what you are doing and do that now because this service is set to expire in April of 2021.

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One last thing – speaking of new accounts and inquiries, when you are applying for credit, take the extra time to confirm your information from the application. This is what is reported to the credit bureaus, so you want to double-check that your social security number, date of birth, name, address, and other information is correct and free of typos. Do it up-front and save yourself the hassle of getting it corrected down the road. Don’t forget that you can also download our mobile app and check your FICO score periodically!

Do you have any questions or comments about protecting your credit score? I want to hear from you! Leave me a comment or email me directly.

Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that will help consumers reach and maintain financial security, and start living the life they’ve always wanted.