Bad credit scores do not necessarily equal bad debts. Have you ever heard of someone going for a loan and being denied because of bad credit, only to find out later it was an error on the credit report? Could it happen to you? Of course, this is a big country with lots of people and some of them have very similar names to you. Or it could just be a random error of the data entry person. What can you do about it?
Every 5 years it is a good idea to check into your credit report. It is always better to start looking before you need the loan. You can contact: experian.com or transunion.com or equifax.com. These organizations seem to be the big players in business and personal credit information.
If you find an error contact the company and find out what is the best way to deal with it. Write it all down because you'll probably need the information to prove your case. Do not be put off it they seem skeptical. People who do have lousy credit will also try to contest their rating. You must prove the error, which takes documentation. When you talk to the credit company make sure you get all the requirements before you start sending them paperwork. It gets quite confusing when you have to send in a few more things, because they probably do thousands of inquiries a year and their desks will be covered in paperwork, just waiting to swallow yours up.
Be patient and consistent in your follow up with any errors you find. When it gets settled make sure you get a written confirmation of the correction. Keep this paperwork handy any time you go for a loan in the future. Just because the one company says they have or will correct their systems information does not mean they will or other companies will. You may need to attach the written report of the correction to your loan application. Be sure to ask the loan company's representative if they would prefer that.
I remember when my loans officer called to tell me, "we may have a problem". What she was really saying was, no to my loan! I could not believe it, I have great credit, and I always paid my credit cards off in time. I have bought and paid off houses, lots of things. This is how I found out about credit report errors, the hard way. I actually lost the deal because I could not fix the company's error in time. An expensive lesson to learn and I hope you take the time to check into your credit before you need it. Be smart, be wealthy.