Complaints about credit report mistakes are among the most frequent types of complaints to the Consumer Financial Protection Bureau (CFPB) and have more than doubled since 2019, according to Consumer Reports. Lenders will use your credit report as a financial history so they can analyse how credit worthy a person is.
However, since the pandemic, many lenders raised their standards to protect themselves from loss so having errors could potentially stop you from getting a loan and get in the way of buying a home.
Therefore, it is important to check your credit report regularly and look out for common credit report errors.
Identity information errors are something to be aware of. These are errors such as a wrong name, phone number, or address.
Everyone should check their accounts belong to them and not someone with the same or a similar name. The creditor may have confused someone with someone else because of similar names and/or addresses.
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Incorrect account details should also always be checked for.
If someone spots an attempted search for credit that they did not make, or a loan or credit card that wasn’t applied for, then they may need to act fast.
It could be a sign of identity theft and although a person will not be liable for that borrowing, it can affect your credit score.
In Consumer Report’s investigation, 29 percent of consumers found incorrect personal information such as a wrong name or address. 11 percent found account information errors, most often an account they didn’t recognise.
Another common error on a credit report is information about specific accounts.
This refers to situations where an account is deemed as open when it should be closed.
Any dates shown of last payments, or accounts opened should be accurate and any debt listed should only appear once.
Justin Basini, CEO and Co-Founder of ClearScore has given his advice on errors within a credit report.
“If information isn’t accurate (e.g., an account appearing as ‘open’ when it is ‘closed’) then your credit score won’t be either.
“This could mean your score is lower than it should be.
“By checking your credit report regularly, you can spot (and fix) any mistakes, which can help boost your credit score.”
When it comes to disputing any mistakes on your credit report you should immediately contact the credit bureau(s).
Concerns should be displayed in a traditional letter or email. It’s important to tell your credit bureau in writing what information you believe is inaccurate.
Without proper notice, credit bureaus won’t know to correct any errors on a credit report.
When making a dispute, you’ll also want to include any documentation supporting your claim.
For example, if a creditor reports you didn’t make a payment, but you did, then you can show proof by providing a bank statement.
It’s a good idea to check your credit report at least six months before you plan to shop for a mortgage, so you have time to find and fix any mistakes.
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