Credit reports contain your credit history, status of various credit accounts, information about loans, debt, and more. Credit reports also contain a credit score that represents your “credit risk” (aka how likely you are to make payments back to a lender on time).
The “big three” credit reporting agencies are Experian, Equifax and Transunion. In addition to the “big three” there are also many additional “specialty credit reporting agencies” that track things such as car insurance claims, apartment rental payments, and more.
Your credit report and credit score can impact all areas of your life, financial and otherwise. It can impact what types of loans you can get (or whether you can get a loan at all), credit card interest rates, and even your employment and/or security clearances.
According to the Federal Trade Commission (FTC), though, one in five people have an error on at least one of their three major credit reports.
Even a small error can affect your credit (and your life!) for years to come. That’s why it’s important to ensure that your credit report is correct. You should review your credit reports at least once a year. You can obtain all three reports by annually evaluating your credit report from all three credit bureaus (find that for free once per year at www.annualcreditreport.com/).
In this post, our credit report lawyers discuss three of the most common credit report errors that you should look for in your credit report.
1. “That’s Not My Debt!”
According to the FTC’s study of inaccuracy in credit reporting, the most common credit reporting error is where there’s a reported debt on your report, but it isn’t yours.
This means that a debt collector or a bank or finance company is reporting that you haven’t paid a debt you owe. These debt collection accounts can seriously damage your credit.
Because they’re not your debts, they’re often a surprise, especially because some debts won’t appear on your credit report until they are reported by a collector. This is often true of landlord-tenant debts and medical debts.
A debt that isn’t yours on your account could mean a few things. It could be anything from a case of mistaken identity (a collector or agency confuses you with the real debtor) to a case of identity theft (someone purposefully stole your identity, opened an account, then didn’t pay it).
These errors can have a big impact on your credit score – the study found that deleting a single false medical collection could improve a credit score by an average of 15 points!
According to that FTC study, though, only about half of these disputes resulted in the information being corrected. If a properly filed dispute does not fix the problem, it may be time to consult an attorney.
Get the best chance at success with a credit report lawyer.
2. “I Never Lived There!”
Other common credit report errors aren’t about your debts or accounts at all; they’re about you.
Name and address errors are common and they can be very important.
The credit bureaus get your identifying information – including your name and address — from all sorts of different sources. Sometimes those sources get it wrong, or get “mixed” with another person’s file.
Often, the mistakes won’t matter. They’ll have you living on Smith Street instead of Smith Road, for example. But addresses that are nothing like the correct ones can be a sign of big trouble.
First of all, false addresses on your report can be a sign that someone has stolen your identity. Identity thieves will often give a false address when they open an account in your name in order to ensure you don’t get notices about the account in the mail.
Having an address you’ve never lived at on your report can also be a sign that the credit reporting agency is confusing you with someone else who has a similar name (known as a “mixed file” case).
Although your name and address don’t directly influence your credit score, the FTC found that correcting name and address errors improved consumers’ scores by an average of 5 points.
3. “That’s Not What I Owe!”
Last on our list of the top three common credit report errors is errors about the amount owed and the payment history.
These were particularly common with collection accounts and more complicated accounts, like mortgage loans, for example.
These kinds of errors could represent a simple mistake by a creditor – like forgetting to cash your check, or miscalculating your escrow account. Or they could arise from a major dispute, like a former landlord or HOA claiming that you owe money for property damage, for example.
RELATED: Debt Collection — HOA Disputes & Issues
These disputes can also have a big impact on your credit score — the FTC study saw that one incorrect late payment could reduce your score by an average of 10 points.
Fight Back Against Common Credit Report Errors — Hire a Credit Report Lawyer
Something else to note about the FTC’s study on common credit report errors:
Almost all errors on your credit report hurt you and favor creditors. Catching and remedying these mistakes will protect you from unjust damage to your credit.
Take the time to catch these mistakes by regularly checking your credit report and disputing anything you find in error. If you have a credit report error that’s damaging your credit and you need help fixing it, we can help.
The Holland Law Firm’s credit report lawyers have years of experience fighting for victims of credit reporting errors.
Whether the error was from a student loan, medical debt, surprise medical bills, identity theft, mortgage, rent, student loans, credit cards, condo/HOA fees or something else, don’t give up. Give us a call to speak to our consumer rights lawyers today.