Mistakes on credit reports aren’t exactly out of the ordinary. In fact, they’re actually pretty common. According to a study from the Federal Trade Commission, one in four consumer credit reports have mistakes on them, ranging from minor to serious.
Don’t just assume that the credit bureaus never make mistakes. It’s always a good idea to check your credit report on a yearly basis in order to make sure any mistakes that might have been made are caught and dealt with. You’d be (unpleasantly) surprised at how seemingly little mistakes can have a big impact on your credit score.
Here are some of the more common errors that consumers find on their credit reports, and what to do about them.
Incorrect Identity Details
One of the most common mistakes found on credit reports are incorrect details about identity. Each of the three major credit bureaus – Equifax, Experian and TransUnion – maintain their own database of consumer information, including personal, account, and payment information.
Sometimes one or all of the credit bureaus will receive information incorrectly. These can range from wrong street addresses (which usually wouldn’t harm your credit score), to something more significant like your name getting mixed up with someone else’s. If the latter is the case, you could start seeing some of that individual’s accounts on your credit report, which could either positively or negatively affect your credit score (depending on that person’s payment history).
Incorrect Details About Your Accounts
There could be times when your lender or bank providing the credit bureaus with your account information might get some things wrong. On the flip side, the credit bureaus might be the ones making the errors – they could be incorrectly processing the information that’s been otherwise correctly provided.
For example, your mortgage could have an incorrect origination date, or your credit card could be showing the wrong credit limit. Theses are all errors that could affect your credit score.
Among all the mistakes on a credit report that would have a negative impact on your credit score, a fraudulent account is the most serious. That’s because it means someone used your identity to open and use an account. If you notice a line of credit on your report that you didn’t open yourself, take measures right away to make sure that the individual responsible for this illegal behavior is no longer able to continue to open accounts in your name.
This can be quickly done by putting a security freeze on your credit reports, which will prevent you – and anyone pretending to be you – from opening any additional lines of credit. Until you’ve discovered what’s happening and have effectively dealt with it, you should continue to keep the freeze on your account.
You’ve Noticed an Error on Your Credit Report. Now What?
If you’ve found a mistake on your report, address it right away with the credit bureau. Disputing a mistake with the credit bureau is the most common route and is usually best for dealing with errors like incorrect personal information on your credit report.
Before you start arguing your position, make sure you get a copy of your credit report with the error first, as well as any other documentation you can use to prove your case. Write a letter outlining your specific dispute, and send it to the appropriate credit bureau. Make sure you make a copy for yourself before you send it off. The credit bureau has a legal obligation to look into the dispute – you can expect them to take action within 30 days of receiving your notice.
You can also choose to dispute the error with the information provider who supplied the credit bureau with the incorrect info. If you go this route, just make sure to keep a record of the conversations that you have with this party.
Don’t assume that everything on your report is necessarily accurate. Do yourself a favor and look over your report every ear, and if you notice any errors, deal with them right away before they do any damage to your credit score. Remember: you’re entitled to one copy of your credit report from each of the three major credit bureaus each year – for free – so you’ve got nothing to lose.