When you start looking at credit report error statistics it’s easy to quickly get frustrated.
There’s a ton that could and that does go wrong with the reporting of your credit information.
Did you know that studies have shown that as much as 79% of credit reports contain errors of some kind?
With 25% containing errors that would lead to denial of a loan.
Why the Errors in Your Credit Report?
Why does something so crucial to your financial success have to be so darn complicated and just plain messy? Can’t these people get it right? It’s been around long enough, hasn’t it? Reminds me of the IRS tax code. Except in the case of credit reports, we don’t have CPAs to help us figure it out.
But you can’t just leave your credit report alone and expect everything to be okay. Unless you’re debt free and don’t need a loan (Hey, there’s a thought!). Chances are, based on the number above, something is wrong with your report and that something could be lowering your score by enough points to cost you a lot of money, sooner or later.
My Credit Report Errors
I can’t say I’ve ever found a major error on my credit report. I also can’t say I’ve looked really closely at it. Every year I visit annualcreditreport.com and pull one or two of my free credit reports. I scan the report to make sure my personal information is correct and that the credit accounts listed on the report all belong to me.
I also scan the report for any reported negative items. Honestly, once I realize there are no big, glaring issues, I move on.
The last time I checked my credit report I did find one small error. The report states that one of my aliases is my middle name, followed by my first name initial as the middle name, and then my last name. I don’t think I’ve ever signed up for credit, or gone by that name when applying for credit or holding a job so I don’t know where they got the name from.
I’m not terribly worried about this particular error though because there were no accounts that I didn’t recognize. “TP” Money has yet to sign up for any bogus credit accounts. Still, the stat above suggests I should check my reports a bit closer next time.
Common Major Errors Seen in Credit Reports
So, what are the most common types of serious errors seen on credit reports? I put together a quick list for you based on the information I’ve been reading in Liz Weston’s book, Your Credit Score:
- Names that are not you (not just misspellings)
- Social security numbers that aren’t yours
- Address where you’ve never lived
- Accounts and delinquencies that aren’t yours
- Negative items older than 7 years
- Hard credit inquiries that you didn’t authorize
Obviously the biggie is the fourth item there: accounts that aren’t yours. If you have that on your report, you need to get that off as soon as possible. If it’s an active account, it’s a ticking time bomb.
To see more of the types of errors you could have on your credit report, how they affect you, and what you can do about them, I encourage you to check out Liz’s book. You can also read my previous entry on how to fix your credit report.
Have you ever discovered a major error on your credit report? Did it affect your finances negatively in any way?