Red Flags That Your Credit Is in Trouble

Having good credit is an essential part of your financial future. In order to improve and maintain a good credit score, it’s critical that you regularly review your credit report.

Credit reports, however, can sometimes be difficult to read. While all credit reports are presented slightly differently, here are a few general signs to watch for that could indicate that your credit score is in trouble.

Errors in the summary. Most credit reports provide a summary of the information that’s within. The summary is usually near the top of your credit report. If you see negative information on accounts for which you’ve never missed a payment, follow up with those companies right away to see if there’s a problem and how to correct it.

Mistakes in your personal information. Credit reports also include your personal information, such as your name, address, phone number, Social Security number, etc. While it’s not too uncommon to catch a slight misspelling in your name, an incorrect Social Security number, address or different name can be a sign of identity theft. Open a dispute with the credit bureau right away if this is the case.

Incorrect account information. The bulk of your credit report consists of your various credit accounts and the corresponding information. These are usually separated into accounts in good standing, those that have a late payment history and closed accounts. Watch out for accounts you don’t recognize, and review any negative information carefully to make sure it’s accurate. If something is incorrect, contact the credit bureau right away.

Suspicious inquiries. The inquiries section of your credit report documents hard and soft inquiries from current or potential creditors. Hard inquiries are those that come from an application for credit or a loan; soft inquiries are generated by requests for a loan estimate or a current creditor who wants to offer you a credit increase. For this reason, too many hard inquiries can have a negative impact on your credit score. Review this section carefully to make sure there are no hard inquiries from loans you didn’t request.

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