6 Common Credit Report Errors

Credit Report ErrorsWhen 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.

Crazy.

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?

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Last Edited: April 27, 2012 @ 11:09 am
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.

Comments

  1. My wife and I also check our credit reports using annualcreditreport.com. You are able to get a credit report from each of the 3 agencies only once per year (that’s 3 total). We space ours out so that we are reviewing our credit report every 4 months (i.e. Equifax in Jan, Experian in May, TransUnion in Sep…and repeat the next year).

    This way you are likely to catch any potential problems more quickly.

  2. That’s definitely the most efficient and frugal way to do it, RBJ. How do you get your score? Do you use myFICO or one of the score duplicators like CreditKarma?

  3. I do the same thing as RBJ. Every 4 months I pull one of the free credit reports just to make sure things are running smoothly. I also have an account with CreditKarma that i check a few times a month just to make sure there are no drastic sudden changes within those 4 month periods between reports. Give me peace of mind for sure!

  4. I’ve yet to get my score, but plan to do so soon b/c I plan to apply for a loan in the near future. I’m more concerned with keeping my record clean than I am concerned about my actual score. Also, I’ve read where the scores vary per “score keeper,” and lenders use different “score keepers,” so I’ve yet to pay for my score.

    Ramit discusses some good points and options around FICO scores in his recent book (I Will Teach You To Be Rich). I plan to use his advice.

  5. Good point about the score. Hey I’m reading Ramit’s book right now too. Good stuff. I plan to do a review at some point.

  6. Definitely need to check my report out! My husband just pulled his report and found a major error on it! Mine shouldn’t be too detailed, but I am especially concerned about it now.

    Would love the book to learn more!

  7. We had someone in our Financial Peace University class pull their credit report after one of the lessons, and ended up finding some fraud going on with an account they didn’t know had been opened. They were able to get it cleaned up, but scary stuff.

  8. I work with credit scores all day long, and find mistakes everyday! It’s often amazing what is on there that a consumer has no idea about. Making the corrections and going through the hoops to do such is so important. A good credit score can really go a long way!

  9. Thanks for your comments everyone. The giveaway is now over. Jules, you are the big winner. I’ll email you shortly to get your address. Thanks!

  10. Well…based on my schedule, it was time to check my credit report this weekend. I’m now 2 for 2 finding errors on my credit report with a specific agency (not named).

    In 2008, it was an unpaid bill with a company that I’d never used, for a residency 1000+ miles away. Disputed and cleared.

    In 2009, I’m named the losing defendant in a lawsuit for $5k. The court house is in the city where I live. The defendant and I share the same last name and 1st initial. I guess that’s close enough for those editing the reports at the credit bureau. Remind me again what SSNs are for…if the gov’t is not going to use them (had a previous issue with DMV not using SSN). Anyway, the online dispute has been launched and hopefully will be removed/cleared soon.

    This just goes to show how important it is to review your credit report on a regular basis.

  11. Does it count as an error on a credit report if there are accounts turned to collections that have actually been paid years ago? When my husband and I were applying for a mortgage, he got turned down because he had supposedly unpaid medical bills–from when he was 19. His parents insurance should have covered the charges, but his mother cannot find paperwork from that far back (my husband is 30 now). The collections agency hasn’t even been helpful when we contacted them for more information. Can we dispute the collections notice on his credit report even if we can’t prove the account was paid?

  12. Can you give the name of the shops that put my name at credit berue.

  13. I actually had 

  14. When I first met my wife, she encouraged me to check my credit report and I’m glad I did. I found out that someone had bought a house and stopped paying the payments on it. My name is Jeremiah Brown, and this guy’s name was Jeremiha Brown and lived in a county that I  had never been to! Because the spelling of our names were so similar, they got mixed up by the loan department and I was getting the bad wrap for it! Now I stay on top of my credit report even though I refuse to get a loan or credit card (after becoming debt free woohoo!) but will have to for our next home 5 years down the road.

  15. ChristinaLundy says:

    Thank you for this article. I just checked my credit score because I want to purchase a house within the year and it’s important for me to know where my credit stands. I’m directing all of my friends to this article.

  16. ChristinaLundy says:

    Thank you for this article. I just checked my credit score because I want to purchase a house within the year and it’s important for me to know where my credit stands. I’m directing all of my friends to this article.