Common Credit Report Errors You Need to Know About

Common Credit Report Errors You Need to Know About

Your credit report plays a crucial role in your financial life, influencing everything from loan approvals to interest rates. However, errors in these reports are more common than you might think. To protect your financial health, it's essential to regularly review your credit report and know what to look for. Let's dive into the most common credit report errors and how to spot them.

Identity Errors
One of the first things to check is the accuracy of your personal information. Look for:

• Misspellings in your name, incorrect phone numbers, or wrong addresses

• Accounts that don't belong to you but are listed under your name

• Suspicious accounts that could indicate identity theft

These errors might seem minor, but they can have significant consequences. For instance, a "mixed file" occurs when your information gets confused with someone else's, potentially affecting your credit score.

Account Status Inaccuracies
Next, scrutinize how your accounts are reported:

• Closed accounts incorrectly shown as open

• Accounts where you're listed as the owner instead of an authorized user

• Inaccurate reporting of late or delinquent payments

• Wrong dates for last payments, account openings, or first delinquencies

• Duplicate listings of the same debt, possibly under different names

These errors can significantly impact your credit score and financial opportunities.

Data Management Errors
Finally, check the numerical details:

• Incorrect current balances on accounts

• Inaccurate credit limits

Even small discrepancies in these figures can affect your credit utilization ratio, a key factor in determining your credit score.

What to Do If You Find Errors

If you spot any of these errors, don't panic. You have the right to dispute inaccurate information. Here's what to do:

1. Contact the credit reporting company that provided the report

2. Reach out to the lender or company that furnished the incorrect information

3. Follow the dispute instructions provided in your credit report

Remember, maintaining an accurate credit report is crucial for your financial wellbeing. By regularly checking your report and promptly addressing any errors, you can ensure that your credit score truly reflects your financial responsibility.Stay vigilant, and don't hesitate to take action if something doesn't look right. Your financial future may depend on it!

Check your credit report for free at Annual Credit Report

Real Example of Mixed Credit File

Siblings, especially twins are more likely to have their credit files mixed than most people. One man had realized that his credit file continued to be mixed with his twin sisters file. The US credit rating agencies can’t seem to tell them apart. Sometimes they associate his social security number with her name and vice versa.  

When he applied for a job, his background check listed his name as hers; and his actual name was listed as an alias. They have both been consistently rejected for credit cards, despite both of them having good credit. Mitchell was denied a car loan by a bank that he had used for years. However, they did have luck obtaining housing. 

This is a problem that they have to worry about anytime they apply for credit. They never know what information is coming up when their file is pulled. 

The problem doesn’t lie within the banks or lenders, but the credit system. In the United States, the Big Three: Equifax, TransUnion, and Experian have the most control over our information. These companies obtain hundreds of data sources to predict your credit score. In this mass of data, mistakes happen. 

When a credit system messes up, consumers are supposed to have a recourse in fixing the problem. Each agency has a dispute process. When a consumer disputes an error, the credit bureaus are required to do an investigation. When that fails, consumers are oftentimes unsure of what to do. The next step is to file a complaint with the Consumer Financial Protection Bureau (CFPB), which will forward your complaint to the appropriate ratings agency. 

Unfortunately, these situations go in circles. The furnishes will verify your information with the creditors and the creditors will verify your information with the furnishes. In the twins situation, the male pulled his files and mailed in physical proof of his identity, such as his social security card and drivers license. After investigation, his reports still listed his sister as an alias or a former name. 

These situations are rarely heard of, but happen often. In this situation, it is likely due to their social security numbers “matching” in the system. Since they are twins, they were likely given social security numbers that are one digit off. The credit bureaus consider this a match, since they only verify 8 out of 9 digits. They also have the same last name, and likely lived in the same household growing up, giving the bureaus verification that they are the same person. 

We recommend that you check your credit reports a few times a year. This is especially important if you may have a relative with a similar name. Many people do not realize their credit has been compromised until they are denied credit. You can check your credit reports for free once a week until April of 2022 at www.annualcreditreport.com 

If you have investigations that keep failing, contact us for help. You may be entitled to a settlement.