Common Credit Reporting Errors To Be On The Lookout For

I was recently reviewing a prospective client’s credit reports. She was in her early thirties and the first two bureaus that I looked at correctly reported her identifying information. When I came to the third bureau, however, I was surprised to see her date of birth listed as 1912. That’s right, two of the bureaus identified her as a thirty-two-year-old and the third reported that she was 107!

Credit reporting mistakes, in fact, are fairly common. In a Congressionally mandated study performed by the Federal Trade Commission in 2013, it was determined that one in five consumers had a mistake on at least one of their three credit reports. (You can view a summary of that report here: FTC Study ) Frequently, those mistakes are causing damage to their unfortunate recipients’ credit scores.

Bad Data Entry By The Credit Bureaus Or Your Creditors

When looking at your credit reports (you need to look at all three of your reports from the national credit reporting agencies-Equifax, Experian, and Transunion) you need to check your name (you will sometimes see different iterations of it, especially if you’re a woman who has been married) the spelling of your name(s), your date of birth, your address and historic addresses, and your social security number.

Check this information carefully, it may be entered properly on one or two of the bureaus’ reports, but be entered improperly on the remaining ones.

My “107-year old” client’s birthdate was only entered incorrectly by one of the bureaus. (They were only off by 75 years!)

Seemingly small errors can have a massive impact on your credit scores. 

Identity Theft And Mixed Files

Someone else’s information could also show up on your report because they’ve fraudulently opened an account in your name and are using your social security number. Just consider all the big data breaches that we have become aware of over the past several years, including the one at one of the credit bureaus, Equifax, in 2017.

It is also fairly common to encounter what is referred to as a “mixed credit file.” Are you a “Junior” or even a “III (Third)?” Check your reports closely for information that may properly belong to Dad or Grandpa’s credit report.

Are you a twin or a triplet whose parents gave you and your sibling(s) similar-sounding names? Guess what “Larry?”, there may be accounts on your report that belong to your brother “Harry” who struggles to pay his bills on time. We see it more often than you would think.

Accounts That Are “Double Reporting”

It is also fairly common to see one account on a credit report listed more than once. We’re not talking about it appearing once on each bureau’s report, for a total of three times. (As an aside, be aware, not all creditors report to all three credit bureaus. Some creditors only report to one bureau, some report to two and some report to all three of them.)

The accounts could be straight-up “carbon copies” of the same account, or one account showing up two times with different identifying information for your creditor (For example “store cards” for retailers may show up under the name of the retailer, and then, once again under the name of the bank that issued that card-as a separate account). If accounts are double reporting that contain derogatory payment history or have a high rate of credit utilization, they are likely doing double damage to your credit scores!

Out-of-Date Information

Under the terms of the Fair Credit Reporting Act, 15 USC section 1681, derogatory information on your credit report can only be reported for seven years from the date of the last activity on the account. (Certain items, like bankruptcies can report longer. Bankruptcy filings stay on your report for ten years.) Make certain that these sorts of accounts are properly reporting the date of the last activity and that seven years have not passed since that proper date.

Inaccurate Account Details

Even in the instance that all the accounts appearing on your reports are your own, you should still carefully examine the details of each account. Scrutinize your account balances and their associated credit limits. Put your payment history under the microscope and check it for complete accuracy.

Your payment history and credit utilization make up two-thirds of your credit score, so it’s incredibly important to your scores that these items be reported accurately. 

In summary, reporting errors occur commonly in the credit reporting process. You should do your best to review your report regularly-monthly, but at the very least once a quarter. Don’t just look at your scores, dig into your history. Investing your time into a thorough, regular review of those reports could end up saving you money in the long term.