Lenders want to know your credit history to decide whether they should approve you for a loan or deny you. They use risk assessments and underwriting to determine how much of a risk you present to them. In most cases, higher credit scores means you present a lower risk to lenders. In addition, if you look like you’ll present a higher risk to a lender, the lender may give you a loan but charge you a higher interest rate.
Do lenders only consider your credit score when determining whether you need a loan? No. The information you provide on your credit application also makes a major difference. Lenders will also consider your monthly income, cash and investments, such as retirement accounts, stocks and bonds, for example, in their evaluation process.
Check for Common Credit Errors
Did you know that you should take advantage of those free credit report offers you hear about? They’re definitely not a scam and they definitely don’t cost you anything, so it’s to your advantage to use them. Why?
Credit reporting errors happen more often that you probably realize. In fact, one in five people has an error on at least one of their credit reports, according to a study conducted by the Federal Trade Commission. Common errors can include:
- Personal information errors (mixed up names, phone numbers and addresses) which may or may not relate to identity theft issues
- Account statuses reporting incorrectly
- Debts listed more than once
- Balance errors (including incorrect balances)
You may spy other errors not related to the errors above after you check your credit. You want to fix these errors as soon as possible because not doing so can affect your future.
How to Check Your Credit and Dispute Errors
You can tap into free credit score information through your credit card company or credit card monitoring service that involves a paid subscription.
You can also access your annual credit report for free through AnnualCreditReport.com, the only federally authorized source for free credit reports. You get access to all three of your credit reports for free once each year.
You can dispute errors by reaching out to credit bureaus directly:
- Equifax: Visit ai.equifax.com/CreditInvestigation or call 1-800-864-2978.
- Experian: Visit experian.com/disputes/main.html or call 1-888-397-3742.
- TransUnion: Visit dispute.transunion.com/dp/dispute/landingPage.jsp or call 1-800-916-8800.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.