On Your Credit, You Should Sweat the Small Stuff

One client couldn't figure out why she was denied credit. Turns out, she hadn't provided the right information on a credit application and the credit reporting agency thought she was someone else.

Another client pulled his credit before a mortgage application, saw some incorrect information, and assumed that it was an inconsequential error. The mortgage application was approved for a higher interest rate than he would have had to pay if the error wasn't there.

If you read my book 90 Day Credit Challenge, you may have read about another client who was very nearly denied a mortgage refinancing because his credit report was showing two current addresses (his real current address and another one that was incorrect) and it delayed his closing for two weeks.

Another client was rejected for a new car loan because of some overdue credit card payments. She investigated and found that the payments had been made on-time but just not correctly reported.

These are just four stories of the many, many horror stories out there that teach us one important lesson: When it comes to credit, details matter. It's the details that will determine whether or not you get the credit you are applying for, and whether or not you get an attractive interest rate or a lower down-payment. And the scary part is: Many credit report have errors on them that could lead to less favorable or even declined credit applications.

Don't assume that the details you give will be fact checked against an absolutely correct version of your past. Don't assume that people will be able to read your handwriting on your credit application. Don't assume that the banker who is typing your information into their computer is filling out the correct fields with the most accurate information. Don't assume that just because you go by John Smith in one loan and Johnathan Smith in another loan that the credit reporting agencies will all recognize these two loans belong to you. Don't assume that the information reported in your credit report is correct or up to date.

When it comes to credit, leave nothing to chance. Here are some tips to help you sweat the small stuff:

• You should be regularly pulling your credit reports and reviewing them to ensure that they are as clean as possible. Go through them with a fine-toothed comb. Do this as least every 6 months. You might find a lot of errors at first but you'll start to weed them out so that there might be only a couple now and then.

• And when you have a large credit purchase a month or two down the road (including a house purchase or a car purchase), pull your credit again and review it.

• When you fill out a loan application, double-check the details - even if someone else types in the information.

• Keep good records of invoices, payments, and dates.

Our credit is so important and it requires an attention to detail. Although you should ignore some of the wrinkles in life, you should sweat the details in your credit.