Credit report errors can be more than just annoyances – they can have serious implications on your financial health, affecting everything from loan approvals to interest rates and insurance premiums. So, if you find an error on your report, it’s important that you act quickly.
Look Out for These Common Errors
As you explore your credit report, there are going to be a few specific errors that you’ll want to be particularly cognizant of. These are the most common and, therefore, most likely to be present on your report:
- Incorrect Personal Information
It might seem like a minor issue, but inaccurate personal information on your credit report can lead to serious headaches. Even small mistakes involving your name, address, or Social Security number can create confusion, potentially causing someone else’s financial data to end up on your report. Mistakes like this can happen if you’ve recently changed addresses or your name is similar to someone else’s. Unfortunately, it can also mean that negative information from another person’s credit report may show up on yours.
If you see any inconsistencies with your personal information, contact the credit reporting agency immediately. Double-check your Social Security number, current and past addresses, and names listed to ensure they’re accurate. A minor fix here can prevent major misunderstandings later.
- Outdated Account Statuses
Another common error is outdated or misreported account statuses. For instance, an account you’ve paid off might still appear as “active” or “unpaid,” which can hurt your credit score and make it look like you owe more than you do. In other cases, closed accounts may still be marked as open, affecting the amount of credit you have available.
It’s important to make sure that all accounts on your report are accurately labeled. If you’ve paid off an account, it should reflect that, and if you’ve closed a credit card, it shouldn’t still be listed as open. Contact the credit bureau with documentation of your account status, like a statement showing a zero balance for closed accounts, to ensure they update your record accurately.
- Duplicate Accounts
Duplicate entries are another frustrating error. You may find the same account listed twice, making it appear as though you have more debt than you do or making your credit report look cluttered and less accurate. Duplicate entries can happen when a lender mistakenly reports an account twice or if it’s been sold to a debt collector.
To address this, carefully review each account on your report. If you spot duplicates, gather your documentation and notify the credit bureau. Clearing out these duplicate entries can improve your credit score and make your financial profile look more favorable to lenders.
- Misreported Payment Histories
Your payment history has the single largest impact on your credit score. One late payment or missed payment on a loan or credit card can seriously harm your credit score for years, so it’s crucial that every payment on your credit report is reported accurately. Unfortunately, mistakes here are not uncommon. You might find an on-time payment reported as late, or an error indicating that you missed payments you actually made. If you notice any misreported payments, contact the credit bureau and your lender.
“Regularly reviewing your credit report and promptly disputing any inaccuracies with the credit reporting agencies is essential to maintaining accurate credit information,” attorney Jibrael S. Hindi advises. “If you need guidance during this process, discuss your options with a FCRA attorney at no cost to you.”
This can give you the legal support you need to get errors in your payment history removed quickly and accurately.
- Incorrect Account Balances
When your account balance is reported incorrectly, it can make it look like you owe more money than you do, affecting your credit utilization ratio and ultimately your credit score. If you’re showing a higher balance than you have, it signals to potential lenders that you’re overextended or struggling with debt, which could make them less likely to lend to you.
It’s a good idea to keep track of your balances on credit cards and loans, especially if you’re working on reducing your debt. If your report shows a higher balance than what’s accurate, contact the lender and credit bureau with recent statements to prove your balance. An accurate credit utilization ratio will help your credit score and make you look more appealing to lenders.
How to Dispute Errors on Your Credit Report
If you spot any of these errors on your credit report, don’t panic—credit bureaus are required by law to investigate and correct inaccuracies if you dispute them. Here’s what to do:
- Get Copies of Your Credit Reports: Start by requesting a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) via AnnualCreditReport.com. This will help you see if the error is present across all three reports.
- Document the Error: Make copies of any records related to the error, such as account statements or proof of payment, and highlight any discrepancies.
- File a Dispute with the Credit Bureau(s): You can dispute errors online, by mail, or by phone with the respective credit bureau. Provide a clear explanation of the error, include any supporting documentation, and keep copies for yourself.
Credit bureaus have 30 days to investigate and respond to your dispute – so make sure you follow up. If they confirm the error, they’ll correct it on your report, which can improve your credit score. If they deny the dispute, they’re required to provide you with an explanation.
Moving Forward
It’s important to regularly check your credit report. Some experts suggest pulling all three of your credit reports at the same time each year. Others suggest spacing them out and pulling a free copy of each credit report every four months. You can decide what’s best for you, but the important thing is that you’re diligently reviewing these documents on a regular basis to avoid letting errors sit on your report for any period of time.
