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Should you sue over errors on your credit report?

September 3, 2013

Author: Allison K.Watkins

Should you sue over errors on your credit report?

How Much Can You Save?



In short, no. I’ll make that clear before getting on with this post. You should probably not sue anyone over errors on your credit report.

However, that’s exactly what Jose Luis Calderon did. According to BankRate.com, Calderon “was turned down for a car loan and a mortgage due to a public record stemming from a debt recovery lawsuit and an outstanding collection that Calderon claims are not his.” He sent a bunch of letters to Experian, to no avail, and then decided to go all-out by suing the credit reporting company.

While we won’t know whether or not Calderon is going to win this case for quite a while, there is an example of success in this area, as an Oregon woman was awarded over $18 million for a serious error on her credit report that likely did a great deal of damage to her financial stability.

What should you do?

So why am I telling you this if I don’t recommend suing over credit report errors? Because I want to make it really clear how important it is to check your report on a regular basis. People have made a lot of different estimates, but it’s safe to assume that at least 1 in 20 people has an error on their credit report which could cause you some financial difficulties. Calderon, for example, was denied both a car loan and a mortgage.

I’ve said this many times before, but I’m saying it again because it’s some of the best financial advice that I can give you, no matter what your current financial circumstances are. The errors on the reports discussed above resulted from getting the credit report of one person mixed up with the report of another person with the same name. You’d think credit reporting companies would have figured out how to avoid this, wouldn’t you?

Anyway, the best way to deal with this is to check your credit report regularly. It’s free, and it could save you a lot of time, effort, and money. And look over the report carefully. If you have years and years of information on there, it could be a pretty complicated report. And I know it might not be much fun, but it’s a good idea to read through it very carefully. Even a minor issue on your credit report could indicate a problem with the reporting agency that needs to be addressed before it becomes a major problem.

Of course, if you’re in a drastic situation, you might want to talk to your financial advisor and your lawyer.

Where to check your credit report

The three major reporting agencies, Equifax, Experian, and TransUnion, each offer reports from their websites, but the most efficient way to get your report is to use something like annualcreditreport.com, which will give you your reports from all three. This is a good idea, because you can compare them to see if one is different, which probably indicates a problem.

Remember—spending a little time once a year checking out your credit report can save you potentially hundreds of thousands of dollars worth of time and money. It’s worth it!

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