Is Experian Accurate? Understanding Credit Scores and Credit Reports

When it comes to your finances, having an accurate credit report and credit score is extremely important. Your credit report and score are used by lenders, creditors, insurance companies, landlords and even potential employers to help determine your creditworthiness and risk level But with your credit information coming from multiple sources, it can be confusing to know if everything is reported correctly. So is Experian, one of the three major credit bureaus, accurate and reliable?

What is Experian?

Experian is one of the three main consumer credit reporting agencies along with Equifax and TransUnion. Headquartered in Costa Mesa California, Experian collects and aggregates credit data on consumers from lenders, banks, and other creditors in order to compile comprehensive credit reports.

Experian’s credit reports provide detailed information on an individual’s credit history, including:

• Identifying information (name, address, Social Security number, etc.)

• Credit accounts (credit cards, loans, mortgages, etc.)

• Account history (open date, credit limit, balance, payment history, status, etc.)

• Inquiries (hard inquiries from applications for credit)

• Public records (bankruptcies, judgments, tax liens, etc.)

Along with credit reports, Experian also provides credit scores using the FICO scoring model. FICO scores range from 300 to 850, with higher scores indicating lower credit risk.

How Does Experian Get Your Credit Data?

Every month, lenders and creditors that you have accounts with report your account activity and status to the credit bureaus. This includes banks, credit card issuers, auto lenders, mortgage lenders, utility companies, etc. Experian compiles the information from all of these sources into your credit report.

Positive credit information that gets reported includes:

• On-time payments
• Low credit utilization
• Variety of credit types
• Length of credit history

Negative marks that can impact your credit report include:

• Late payments
• Defaults or collections
• Bankruptcies
• Foreclosures
• Judgments

Experian does not generate any of this information themselves. They simply compile the data furnished by all of your lenders and creditors on a monthly basis.

Is the Information Accurate?

The accuracy of your Experian credit report depends on the accuracy of the data supplied to Experian by your lenders and creditors. Since Experian does not generate any of the information firsthand, they rely on receiving correct data from thousands of reporting agencies every month.

There are a few ways that incorrect information can end up on your Experian credit report:

• Data entry errors: A lender or creditor may report incorrect information due to typos or data entry mistakes. This could include wrong account numbers, misreported payment dates, incorrect balances, etc.

• Outdated information: Accounts that have been closed or information that is outdated may not get updated or removed by creditors as it should be.

• Mixed up identities: If you have a common name, information belonging to someone else may get mixed in with yours.

• Unverified information: Experian is required to verify disputed entries, but not all information is verified when it is initially received from lenders.

According to Experian, 98% of credit reports contain no errors that would cause a score change. However, a report by the Consumer Financial Protection Bureau found that 1 in 5 consumers had verified errors on their credit reports.

How to Check for Errors on Your Experian Credit Report

Since data errors can and do occur, it’s important to periodically review your Experian credit report so you can dispute any inaccuracies you uncover. Here are some tips for checking your report:

• Obtain a free copy of your Experian report at AnnualCreditReport.com. You can get one free report from each bureau every 12 months.

• Review all information and accounts carefully. Make sure names, addresses, account numbers all match your records.

• Check that balances, credit limits, and payment statuses are reported correctly.

• Look for any outdated or incorrect information that should be removed.

• Watch for accounts that don’t belong to you or indicate identity theft.

• Consider purchasing your FICO score from Experian to see what score lenders view.

• Monitor your report routinely to stay on top of changes.

How to Dispute Incorrect Information

If you find any errors or outdated information on your Experian credit report, you have the right to dispute it by following these steps:

• Report the dispute online at Experian’s dispute center or by mail. Provide details on what information is inaccurate and why.

• Submit copies of documents that support your dispute, like account statements or proof of payments.

• Experian will contact the lender or creditor that supplied the information to investigate.

• If the creditor cannot verify the entry, Experian is required to remove or modify the information.

• You may add a statement to your credit report to explain any disputes.

• Experian must complete an investigation within 30 days of receiving your dispute.

Maintaining Credit Report Accuracy

Since credit report errors could negatively impact your ability to get approved for credit or loans, it’s crucial that you maintain accurate information by:

• Routinely checking your Experian credit report for errors – at least once per year.

• Disputing any inaccuracies right away with supporting documentation.

• Paying all bills on time to avoid incorrect late payments or other credit damaging information.

• Reviewing account statements closely against your credit report data.

• Promptly reporting any fraudulent accounts or identity theft.

• Providing creditors with account updates like address changes or new phone numbers.

While Experian and other credit bureaus gather your information from outside sources, you play a big part in ensuring that your credit report is error-free and portrays your creditworthiness accurately! With routine credit report checks and quick dispute resolutions, you can rest assured the information Experian has on file for you is precise.

Key Takeaways:

• Experian is one of the three major credit bureaus that compile credit reports

• They gather data from lenders and creditors that report your payment histories

• Errors can occur from incorrect data being supplied to Experian

• It’s important to check your Experian report for inaccuracies and dispute them

• You have the right to dispute any incorrect or outdated information that appears

• By routinely monitoring your credit report, you can help maintain accurate information with Experian