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What are credit report errors?

Having errors in your credit report can greatly affect your FICO score rating. This can cause a lot of inconvenience in your life.

At times, employers may need to check your credit score before you qualify for a job. It is also common for landlords to look into your credit report before you rent an apartment. Here are some of the errors you need to check out in your credit report and how you can correct them.

Personal information errors

Sometimes credit bureaus mistakenly identify one consumer with another or list incorrect addresses on the consumer’s credit report. These are mostly due to identity or personal information errors.

These are the top identity mistakes that you need to be aware of and should also check to ensure that they don’t appear on your credit report.

  • Incorrect name
  • You have a misspelling of your name
  • Incorrect middle initial
  • Incorrect contact information (e.g., phone number and address)

When you move into a new house, change your name or get a new number, it is important to update your basic personal information as well.

To avoid future debts, if you have joint accounts with your ex-spouse and if you file for divorce, it is best to remove your name from those accounts.

Mistaken account errors

Check your credit score to see how many open accounts you have. Sometimes, a loan or retail credit card may be opened in your name when you are not involved. This could be due to identity theft or clerical error.

Clerical errors can also occur when another consumer has the same name as yours. These errors are easy to spot if someone else’s information is on your report. These errors can adversely affect your credit utilization ratio or credit rating. You should update your creditor immediately.

Unusual accounts may also indicate that someone has attempted to steal your identity by using your social security number or name.

You should immediately notify your creditor if you suspect you are a victim of identity theft. It can take a long, complex process to recover from the damage done by identity theft. It is best to arrest the thief immediately and minimize its legal and financial risks.

Account Reporting Errors

There may be errors in your account status as well. Missed or late payments are among the most concerning of all these errors. You could end up defaulting on your payment if you take it as a given. These errors can also significantly reduce your credit score.

Here are some of the most common account reporting errors that can occur in your account.

  • A closed account is reported as closed or vice versa
  • Late or non-payment of account payments on time are reported
  • Incorrect dates for late payments
  • Incorrect date for opening or closing account
  • Incorrect balance
  • Incorrect credit limit

Your credit score will be severely affected if closed accounts aren’t properly labeled and categorized. When you see your credit score, you will know that you are in serious trouble. These accounting errors must be challenged before they negatively impact your credit.

Steps to Dispute Credit Report Errors

The Fair Credit Reporting Act (FCRA) imposes similar responsibilities on both credit reporting agencies and information providers to correct inaccurate credit reports. You are the first to correct credit reporting errors. The FTC recommends that you follow the following steps.

Find out the mistakes in your credit report.

Once you spot any type of mistake, ensure that you confirm with your creditor( e. g bank/credit card company) before filing a dispute.

File a complaint

To do this, you need to send a dispute letter to credit agencies, informing them of the errors.  You should ensure that the correct information or figures are included in your dispute letter.

Then attach “copies” of your report (not the original copies) with highlighted errors and supporting materials. Keep a copy of all the important documents.

Make a follow-up

Call credit reporting agencies within 30 days to follow up on your dispute and inquire about their actions. (Usually, the investigation takes less than one month.

Conclusion

Everyone wants to have great credit scores. We do this by making timely payments, using a solid credit mix, and strategically limiting our credit usage.

If a credit report error is not corrected, all of this will be lost. You should therefore keep an eye on your credit reports and immediately dispute incorrect information.

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