Your credit report is one of the most important financial tools you’ll ever have. It’s so much more than financial though; your credit report also tells your full story.
Your identity, your job, how responsible you are with your bills, and even any legal action taken against you all make up your credit report.
Having an error or two on your report may not seem like a big deal.
But when a seemingly small error causes a major drop in your credit score, you’ll wish that you checked your report more frequently and took action sooner.
Credit report errors are more common than you think. Data provided to the credit bureaus come from several sources, making the margin of error high.
Approximately one in five people have an error on their report and, unfortunately, most of them don’t know anything about it.
The more you check your credit report, the likelier you are to catch an error quickly and take the necessary steps to fix it.
Here’s everything you need to know about credit report errors and how to make the pesky mistakes go away once and for all.
Common Types of Credit Report Errors
If you already get a free copy of your credit report annually, good for you! You’re taking the first step toward staying on top of your credit and your identity to ensure there’s no sketchy stuff going on.
Even if you’re armed with your credit report, it doesn’t mean that you know how to read it or what to look for regarding errors.
Credit report errors are common, and they almost always take the shape of one of the following mistakes:
It’s possible that your creditors are updating your accounts regularly but that they are providing inaccurate information.
People in the accounting department can make mistakes, and a simple mistake that involves the wrong numbers (like a $200 credit card balance with an extra 0) can damage your credit quickly.
It’s a smart idea to keep accurate records for yourself so that you can check the information on your credit report against your records. Download your bank statements or print and file them for future reference.
You should also check that your credit card information has the correct credit limits showing on your credit report.
The less of your credit limit you use, the more you boost your credit score.
A credit limit that’s displaying much lower on your credit report than what you have available will make it look like you’ve used more of your available credit than you have.
Incorrect Account Reporting
This type of error goes along the same lines as incorrect balances. There are several mistakes a creditor can make when reporting your accounts, all of which can put a ding in your credit score.
Some of the things you’ll want to look for include:
- The length of time your accounts are open. A long, positive credit history is important for a good credit score. If an account mistakenly shows as open for three years when you opened it six years ago, you’ll want to dispute the error.
- Your accounts being inaccurately reported as open or closed. Your credit report should have a good mix of types of credit (student loans, auto loans, credit cards, etc.), so inaccurate reporting of one of these as closed can misrepresent your mix.
- Accounts that aren’t showing or doubled reports of accounts. You want your up-to-date accounts to show on your report to prove your awesome payment history. Similarly, a debt that’s mistakenly showing twice can negatively impact your credit score.
- On-time and delinquent payments. Have you always paid your credit card on time, but your report shows late or missed payments? Delinquent or skipped payments can harm your score, so this is important information not to overlook.
Data mistakes can be made on behalf of either a creditor or the credit bureau itself.
If you’ve already disputed something on your credit report with your creditor or a credit bureau, but the information has either not been changed or was changed but reverted to the old data, then improper data management could be to blame.
Other signs of data management errors can be an account with the correct balance information, but with the wrong creditor information listed (or vice versa), an account that you’ve paid off reappears on your report and debts that agencies should have removed from your report due to their age but still appear.
These errors can be a little tricky to dispute if you don’t know if it’s the creditor or credit bureau who’s making the error.
It’s a good idea to start by contacting the creditor first to ask what information the company has and what information it last reported to the credit bureau.
Information About Other People
You might find information about other people on your credit report. This happens most commonly with people who have similar social security numbers or people who have similar names.
If you happen to find debts on your credit report from creditors you’ve never dealt with, it’s smart to take action fast to dispute these.
Although these are usually honest mistakes, it’s possible that they signal identity theft, so you won’t want to let them linger in the hope that a creditor will catch the mistake itself.
You can also run into mistakes on your credit report involving your own identity.
These will often show up in obvious places like your name misspelled, the wrong address, or your workplace incorrectly listed.
It may not seem like an important issue to address but having the wrong identifying information on your credit report can make it more difficult for you to obtain your free copies or apply for credit later.
Identity errors can also signal possible attempts at identity theft using your credit. People who steal your identity may misspell your name or write your address incorrectly when applying for credit.
If they were successful in opening a new account, the incorrect information might show up on your credit report.
You should also check the recent inquiries on your credit report. Inquiries happen when a creditor pulls your credit report to determine your creditworthiness.
If you haven’t recently applied for any credit, yet inquiries are showing up on your report, you’ll need to take action to prevent any further identity fraud.
The Harm of Letting Credit Report Errors Go Unnoticed (or Unfixed)
Even the smallest credit report errors can have a major impact on your credit score and your ability to obtain further credit.
Even worse, they can signal that someone has committed identity theft using your information. If you’re the victim of identity theft, you may be facing months to years to get your name cleared from debts made in your name.
The longer you wait to fix the problem, the more difficult it can be to reverse the issues that stem from credit report errors.
Errors in your name involving creditors and debts can:
- Make annoying debt collectors call you about debts you may not even have.
- Make it almost impossible for you to open new credit accounts or obtain a loan.
- Falsely display your excellent payment history and make creditors think you’re untrustworthy.
- Give you higher interest rates if you do apply for new credit.
Find these problems early on, and you’ll face less of a hassle getting them corrected.
The key to keeping your credit healthy is to stay on top of it and be proactive when you notice anything that might get in its way.
How to Fix Credit Report Errors
How can you fix errors you find on your credit report once you find them? I won’t lie and say the process is easy because it will take some work on your part.
Follow these steps, though, and you’ll see that fixing your credit is 100% possible, even with the biggest mistakes.
1. Obtain a Free Copy of Your Credit Report
Your first step toward fixing any errors on your credit report is finding them. The best way to do this is by taking advantage of the free copy of your credit report that you’re entitled to every year.
You can order a copy of your report from each of the three credit bureaus – Experian, TransUnion, and Equifax – every year.
That’s three reports to check against each other and your records, giving you more opportunities to find any errors.
To get your copy, visit AnnualCreditReport.com. U.S. government institutions endorse this site, and it’s the simplest way to get a copy of your report from each bureau.
You can request one every 12 months from each credit bureau – three reports in one year – by filling in your information online or by mail.
Once you get your reports, do a thorough check of your identifying information and every item on your report.
Look at the balance, length of time account was open, payment history, and creditor names to ensure that they didn’t make any errors in your name.
2. Put a Freeze on Your Credit
If you find anything that points to potential identity theft at this point, such as open accounts or inquiries that you don’t recognize, then you should put a fraud alert and a freeze on your credit.
This is only something you should do if you believe someone has used your information to try to obtain credit.
A fraud alert tells the credit bureaus that you may be a victim of identity theft.
More security measures will be in place for you or someone else to open any new lines of credit through extra questions and verification processes that only you should be able to get past.
A freeze can stop anyone from accessing your credit report, including yourself.
This can be a hassle for you if you want to open any new accounts shortly, but it can also prevent fraudsters from damaging your credit further until you get the situation solved.
You can contact any of the three credit bureaus to place a fraud alert on your credit report. The bureau will also notify the other two bureaus for you.
The alert will stay active for 90 days, after which you can renew it if you choose.
To place a freeze on your credit, you’ll need to contact each of the three bureaus. They have fees ranging from $5 to $10 to complete the process. The freeze will stay in place for as long as you need it to.
3. Talk to Your Creditor
If your credit report contains errors that don’t necessarily signal a case of identity fraud, then the most likely culprit is a mistake made by your creditor.
You can usually tell if this is the case if you have an item on your report from a creditor you deal with, but the balance, payment history, or some other information is incorrect.
Most issues can be solved by simply contacting your creditor that reports the information.
Usually, all it takes is a phone call to report the information that you found and ask that it be updated as soon as possible with any credit bureau to which the company reports.
If your contact at the company doesn’t seem to want to help, you’ll need to take further action. Some companies won’t want to look further into the issue or may not be as prompt as you need them to be to correct their mistakes.
Others will take the easy way out and blame the credit bureau for tracking your information inaccurately.
4. Dispute Information with Your Creditor
Your next step is to send a dispute to the creditor.
Although people may convince you to go directly to the credit bureau with your dispute, by law you’re allowed to send a dispute to your creditor first to attempt to get the mistake cleared up.
Look for an address for disputes or call the company to get the correct address. Many large companies have an address specifically for disputes that can help you get it processed faster.
Provide as much information as possible to the creditor to prove your case. The company will have 30 days to investigate your claim.
During this time, the creditor will check your information against its own and will determine the accuracy of your claim.
If the company determines that the information it’s reporting to credit bureaus has been incorrect, it will correct this information with the bureaus and send you a letter.
Save this letter, make a copy, and send the copy to the credit bureau(s) displaying the incorrect information on your report.
5. File a Dispute with the Credit Bureau
It’s possible that your creditor denies your request for correcting false information based on the information it has in its system.
If that happens, you should file a dispute with the credit bureau reporting the information instead.
You can, of course, do this first instead of dealing with the company if you believe that the creditor won’t be helpful to you in your situation.
Again, you’ll need to submit evidence with your dispute to prove to the credit bureau that the information your creditor is reporting is false.
With your dispute, be sure to send a copy of the letter you received from the creditor you contacted, if possible, and any records you’ve kept of your account.
You should also consider mailing your dispute rather than completing it online, so you can have plenty of space to explain any issues with your accounts.
Click the following links to find out information about filing a dispute with each of the credit bureaus:
6. File a Legal Complaint Against the Credit Bureau
As a last resort, you may also file a legal complaint against the credit bureau. This is an option people don’t usually know they have available, but you can utilize it when you believe that the credit bureau hasn’t investigated your dispute fairly.
You’ll first need a consumer disclosure, which is a little different than your credit report. It contains information that your credit report doesn’t, such as inquiries made for promotional offers.
You’ll also need proof that the errors on your credit report that the bureau has failed to investigate or remove have caused substantial damage to your credit or ability to obtain new credit.
You can learn more about your rights and how to sue a credit reporting agency here.
When Information Turns Out to Be Accurate but Hurts Your Credit
After you check your credit report and talk to your creditors, you might find that information you thought was reported in error was accurate. It’s okay – it happens to the best of us.
We sometimes keep inaccurate records – or no records at all – of our debts, and it’s even possible to forget about debt from years ago until the debt collectors start calling.
But what can you do if those debts are having a negative impact on your credit score?
The most important thing to remember is not to let these debts fall by the wayside.
Respond to debt collectors, offer agreements and compromises that you can stick to, and pay as much as you can pay each month so that your credit report can reflect your hard work.
Finding an error on your credit report doesn’t have to be the end of the world. The longer you wait to find them and take action, though, the more difficult they’ll be to clear from your name.
Stay on top of your credit and don’t be afraid to talk to creditors to get the situation fixed. If that doesn’t work, you can dispute the error with the credit bureau reporting it.
You have options, and now you know about them. Arm yourself with this information and stay proactive in monitoring your credit.
Have you ever found an error on your credit report? How did you correct it? We’d love to hear from you – share your thoughts in a comment!