What Causes Credit Report Errors

 

Each year, Americans find 13 million inaccuracies on their credit reports. A 2004 report by consumer group PIRG found that 25% of credit reports contained errors serious enough to deny consumers favorable loan rates, credit access and even a job. A shocking 54% of the reports sampled contained misspelled, outdated or outright incorrect personal data.

 

 

Also, 30% of the reports contained credit accounts that were closed by consumers but were still listed as open, active accounts, which may give the impression that a person’s credit is over-extended. Another 22% of the reports had a mortgage or loan listed twice, which makes it seem as though one of the loans is delinquent or hasn’t been paid. In all, 79% of the credit reports contained an error of some facet.


The worst case scenario for credit report errors is identity theft. While it may seem like a long shot, 10 million Americans lost a total of $48 billion to identity theft in 2008! The number of victims rose 22% from 2007-2008, with nearly 1 in 3 US adults affected by this financially devastating crime. James Van Dyke, author of a Javelin Strategy & Research study on identity theft, said the economic recession is likely the driving force behind the increasing crime wave. He adds that almost half the victims had their identities compromised by stolen wallets, credit or debit cards and checkbooks. One in four victims had their ATM pins compromised and 11% of the theft occurred online. “It’s prevention and detection.” Van Dyke warns. While your credit card will show unapproved charges, your credit report will reveal whether someone has opened new accounts in your name – which is most commonly the case with thieves.

 

Video: WFMY News 2 – Protect Yourself From Identity Theft

 

Consequences of Having Credit Report Errors

 

Your credit report is sort of like your life resume. It contains information on where you live, where you work, how you pay your bills, how you borrow money, whether you’ve been sued or arrested, whether you’ve gone to court, if you’ve filed for bankruptcy and if you owe money to an ex-spouse or the IRS. This information is used by creditors, employers, businesses and insurers to determine whether to loan you money, how much to loan you and how much interest to charge. This information should be 100% accurate when you’re going to buy a house, a car, insurance or apply for a new job.

 

denial of credit

 

Imagine the frustration of finding your dream home and being denied a mortgage loan because of a senseless error! In other cases, you may not be outright denied a loan, but a poor credit score could increase the interest rate, which will lead you to pay thousands more on a car or tens of thousands more on a mortgage. Students just starting out may not gain approval for a student loan due to a credit report error.

 

Additionally, credit card issuers sometimes periodically check credit reports and adjust their interest rates, lower borrowing limits or even close accounts spontaneously if they feel you’re a risk! Creditors are looking to cut their losses and run with the sensitive economy, so you can bet when one creditor walks away from you, the others will find out and follow suit.

 

Even some employers are taking a look at credit reports to determine employee responsibility. And government jobs who routinely perform background checks aren’t the only ones snooping. According to the Society for Human Resource Management, 35% of the companies they surveyed admitted to pulling prospective and current employee’s credit reports, which is up from 19% in 1996.

 

Effective Ways To Remove Errors

 

Sending a letter to the three credit bureaus by mail is the best way to remove errors from your credit report. Once you receive your credit report, circle the inaccuracies (you may photocopy if you’d like) and write a simple letter explaining what the errors are and why. Also let them know you’re including backup documentation to speed up the process. This may include credit card statements, letters verifying you closed or paid off an account, a copy of your driver’s license or a copy of your social security card.

 

correct your credit report

 

Consumer Reports says a letter is better because you can then send copies of all this correspondence directly to your creditors to dispute the information as well. It’s always wise to have a paper trail. The credit bureau has 30 days to comply with your request to investigate. Usually you’ll receive a letter back from them stating they’ve removed the information. You’ll need to follow up with them to ensure they’ve taken the inaccurate information off your report. If they fail to comply, you have the right to file a complaint with the FTC. 

 

Video: Why Online Disputing Isn’t So Hot

 

While the credit bureaus offer simple, online one-click credit disputes, this process is often flawed, warns the National Consumer Law Center. You can also file a dispute by phone, but you won’t have the physical evidence that you requested the investigation in case you need it to settle future disputes.

 

How to Contact the Credit Bureaus

 

Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
1-866 640-2273 (urgent)

 

Experian
P.O. Box 2002
Allen, TX 75013
1-888-397-3742
1-800 493-1058 (urgent)

 

TransUnion
P.O. Box 1000
Chester, PA 19022
1-800-888-4213
1-800-916-8800 (urgent)