Question

You've ordered your credit report, and your mom said you should review it for errors. Which of the following should you be looking for?

1) Items you know you did not purchase
2) Credit cards or loans that you did not open or do not recognize
3) Monthly balances that seem too high or too low
4) Entries that are more than 7 years old, because they should not be on your credit report

Answer 1

You should review your credit report for items you did not purchase, unfamiliar credit cards or loans, incorrect monthly balances, and outdated entries older than 7 years. Ensuring the accuracy of your credit history is crucial for a healthy credit score. The correct option is A.

Step-by-step explanation:

When reviewing your credit report for errors, you should be looking for the following:

1. Items you know you did not purchase, indicating possible fraudulent activity.
2. Credit cards or loans that you did not open or do not recognize, which could be a sign of identity theft.
3. Monthly balances that seem too high or too low, as these might be errors in reporting or unauthorized charges.
4. Entries that are more than 7 years old; these should not be on your credit report as they are past the reporting period limit, with the exception of some types of bankruptcies which may remain for 10 years.

Keeping your credit report free of errors is critical for maintaining a healthy credit score, which can be improved by always paying your bills on time and not using too much available credit.

Lenders make credit decisions based on factual information from your past and present financial behavior, and factors like race, gender, and religion are not considered. Hence, ensuring your credit history is accurate is important for obtaining credit in the future. Remember, if you find errors on your credit report, you have the right to dispute them with the credit bureau.