Credit reporting errors are much more common than many people realize. In a study earlier this year, Consumer Reports and WorkMoney asked thousands of Americans to check their credit reports. A whopping 44% found at least one error.
These errors are a serious issue that can cost you money and lower your credit score. That makes it harder to qualify for top credit cards. You'd also pay higher interest rates on loans, and you could even get charged more for insurance. Below, you'll find the most common credit report errors and what you can do about them.
1. Unrecognized debt reported to collections
The most common error is also one of the most damaging to your credit: unrecognized debt that has gone to collections. This can take over 100 points off your credit score.
Unrecognized debt is typically due to identity theft. A criminal opens a credit card or personal loan in your name without your knowledge, uses it, and doesn't pay the bill. You'll need to file a police report and contact both the creditor and the credit bureaus to get the debt removed from your credit file.
2. Unrecognized account
Unrecognized accounts are another issue that is most often due to identity theft. Luckily, if the account hasn't been reported to collections yet, you've caught it early. It probably hasn't done as much or any damage to your credit score yet.
Just like with unrecognized debt, you should file a police report regarding the identity theft. Contact the creditor to notify it of the fraudulent account and the credit bureaus to get the account taken off your credit report.
3. Misspelled or wrong name
A misspelled or incorrect name on your credit report could just be a simple mistake. Sometimes there's a typo or a creditor gets your name mixed up with someone else's.
It could also be a sign of identity theft (you may be seeing a trend here). Criminals may get your name wrong when opening an account using your information. Or, it might be intentional.
A type of fraud that has become popular in recent years is synthetic fraud -- using a real person's information combined with fake information to make a new identity.
To get an incorrect name fixed, contact the credit bureau that issued the report. Be on the lookout for accounts you don't recognize, too, in case the name issue is due to identity theft.
4. Wrong address
Your credit report will have any addresses that have been associated with you. If you see one you don't recognize, start by double checking if there's any legitimate connection. For example, it could be a:
- Temporary mailing address you used
- Work address
- An address for an authorized user or joint account holder
If you don't find any reason for the address to be on your report, it could be related to identity theft. Report it to the credit bureaus, which will then investigate where it came from. Keep an eye on your credit report for any accounts you don't recognize.
5. Payment wrongly reported as late or missed
Creditors usually report payments accurately, but mistakes happen. If that mistake is an incorrect report of a late or missed payment, your credit score could take a hit, at least until you fix it.
To do that, contact the creditor that reported the late or missed payment and the credit bureaus. Provide your payment confirmation, if you have it, to show that you paid on time.
How to check your credit report
Considering how many people have errors on their credit report, it's important to check yours regularly. You can get free weekly credit reports from the three consumer credit bureaus (Equifax, Experian, and TransUnion).
While reviewing yours every week is a bit much, make sure to do it at least once every six months to a year.
You can request your credit reports from all three bureaus at AnnualCreditReport.com. All you need to do is fill out a form and possibly answer a few questions to verify your identity.
Hopefully, you're part of the lucky 56% who don't have any credit report errors. But if you do, all three credit bureaus allow you to dispute errors online on their respective websites. Between that, contacting the creditor, and filing a police report for cases of identity theft, you'll be able to fix your credit report.
