Financial Resource Center

Credit


Common Credit Report Mistakes Could Cost You

by Michelle M. Haas-Dosher, CCUFC / June 19th, 2017


If you haven't requested a copy of your credit report, there are many reasons why you should.

Studies show that a high percentage of consumer credit reports contain errors. One-fourth of credit reports contain such serious errors that those individuals could be denied credit.

What are the common errors?

1) Misspelled names

2) Wrong Social Security numbers

3) Inaccurate birth dates

4) Inaccurate information about a spouse

5) Out-of-date address

6) "Closed" accounts listed as "open"

7) The same mortgage or loan listed twice

8) Absence of major credit, loan, mortgage, or other accounts that could be used to demonstrate creditworthiness

How can these errors happen?

Most mistakes can be pinned to creditors who provide inaccurate information to credit bureaus. Mistakes happen when credit accounts change hands. Other mistakes simply are human error. One report found that some banks admit to not providing credit bureaus with complete information about their customers. Some errors are the result of thieves stealing your personal information and establishing fraudulent accounts in your name.

Why should you care?

Lenders use credit reports to determine the interest rates on loans; the more creditworthy you appear on paper, the lower the rate you pay. Errors may cause you to pay more. In some cases, you even could pay a higher premium for auto and homeowners insurance, because insurance companies have found that people with poor credit histories tend to file more claims. And many people are surprised to learn that a potential employer turned them down for a job because of negative information on their credit report. Federal law, however, requires that the employer get your permission before pulling your report.

How much does a credit report cost?

The Fair Credit Reporting Act requires each of the "big three" credit reporting agencies—Experian, Equifax, and TransUnion—to provide you with one free copy of your credit report, at your request, once every 12 months. Go to annualcreditreport.com to request your reports.

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