Examples of Credit Report Errors

Some credit report errors are harmless. For example, a misspelled name or out-of-date address are errors that won’t hurt your credit. Neither of these impacts your credit score, so trying to clear these errors from your credit report might be more trouble than it’s worth.

Other credit report errors can be worse. This includes things like:

• Credit limits being reported lower than they really are. Since part of your score is based on the ratio of your credit card balance to your credit limit, incorrectly reported credit limits can lower your credit score.
• Credit card payments reported late that were really on time. Late credit card payments are most damaging to your credit score.
• Credit card accounts that don’t belong to you. If the account has negative information like late payments or a high credit card balance, this is especially damaging.
• Debt collection accounts that don’t belong to you or that weren’t actually sent to a collection agency.
• Accounts continuing to be reported delinquent that were included in a bankruptcy.
• Any account reported unpaid that was actually paid.

How to Spot Credit Report Errors

You should check your credit report regularly. Otherwise, credit report errors will catch up with you at the most inconvenient time, like when you’re trying to get approved for a home or car loan. Your application process will have to wait until you’ve cleared the errors from your credit report.

You should be proactive about detecting credit report errors. Review your credit report periodically throughout the year, especially before you apply for a major loan.

You can check your credit report free for free by visiting AnnualCreditReport.com or by signing up for a promotional offer. Otherwise, you’ll have to purchase your credit report through the credit bureaus.

You should check all three of your credit reports from the major credit bureaus – Equifax, Experian, and TransUnion. That’s because your credit reports aren’t exactly alike. There may be accounts on one credit report that aren’t on the others.

Once you receive your credit report, review each detail about each account to spot errors. Use a highlighter or colored pen to highlight questionable items on your report.

Correcting Errors On Your Credit Report

A Federal law, the Fair Credit Reporting Act (FCRA), gives you the right to an accurate credit report. If you find errors on your credit report, you can use the credit report dispute process to remove inaccurate information from your credit report.

If you ordered your credit report online, you’ll be given the option to dispute credit report errors online. Each account on your credit report will have a button next to it giving you the option to dispute that account. Then, you’ll be given a few options as reasons for the dispute. For example, the account isn’t yours, the account was paid on time, etc.

You can also make a credit report dispute in writing. When you find a credit report error, write a letter to the credit bureaus indicating the error on your credit report and why it is an error. If you have proof of the error, like a cancelled check or copy of your bankruptcy discharge, you can include a copy of it to help your dispute. When you send your dispute letter and supporting documentation, include a copy of your credit report with the errors highlighted.

Send your credit report dispute letter is via certified mail with return receipt requested. This gives you proof that you sent the dispute and that the credit bureau actually received it.

Sample Credit Report Dispute Letter

Here is a sample credit report dispute letter you can modify and send to the credit bureau.

Date

Your Name
Your Address, City, State Zip Code

Credit Bureau
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute information in my credit report. I have attached a copy of the credit report with the disputed items highlighted.

This account is inaccurate because {give the reason the information is accurate}. I’m requesting the account be removed from my credit report as soon as possible.

Sincerely,

Your Name

Make sure you update the letter before sending it to the credit bureau so that it reflects the information you’re disputing and the result you want from the dispute. For example, if your credit limit is not reported correctly, you may simply want the account updated rather than deleted.

What Happens After the Dispute

Once you submit your credit report dispute, the credit bureau has 30 days to investigate your dispute and provide you with the results. If the credit bureau determines that you’re right and the credit report does contain an error, the error will be removed and you’ll be given a copy of your updated credit report.

On the other hand, if the credit bureau’s investigation doesn’t return in your favor, you’ll be given a reason why. You also have the opportunity to add a 100-word personal statement to your credit report explaining why the information is being disputed.

Related posts:

1. What to Do About Credit Card Billing Errors
2. Credit Cards and Your Credit Report
3. How to Handle a Lost or Stolen Credit Card

Now, employers use it to decide whether to hire you or even to give you a promotion or raise. Landlords use your credit report to decide whether to rent to you. Even insurance companies use your credit report to set your insurance rates. It’s more important than ever that you know what’s on your credit report.

You have three credit reports – one from each of the national credit reporting agencies or credit bureaus – Equifax, Experian, and TransUnion. The credit bureaus maintain your credit report by updating it with information from businesses with whom you have a financial relationship.

The information on your credit report will fit into one of five categories: personal information, account history, public records, collection accounts, and credit inquiries.

Personal Information

The first section of your credit report includes information that helps identity you. This includes your name, current and previous addresses, date of birth, and your current and previous employers.

There may be several different spellings of your name. Some may include a middle initial. Some may not.

Your social security number may be included on your credit report. Typically, when you order your credit report, you can request that only the last four digits of your social security number appear on your credit report. This reduces the likelihood of your identity being stolen if your credit report is lost or stolen.

Account History

The account history section will make up most of your credit report. If you’ve had credit accounts for several years, your account history could be several pages long.

In the account history, there is a list of all your open credit and loan accounts and some that are closed. Each account will list:

• The date the account was opened
• The original loan amount or credit limit
• The current loan balance or credit card balance
• The highest loan balance or highest credit card balance
• The type of account, e.g. revolving, non-revolving
• The minimum payment on the account
• A complete payment history, including late payments from the last seven years.

Negative account information should only appear on your credit report for seven years. After that, it will no longer be reported.

Public Record

Hopefully, the public record section of your credit report of your credit report will be clear. This section lists information about serious delinquencies like bankruptcy, tax lien, foreclosure, repossession, or judgment. These are some of the worst entries that can appear on your credit report. Entries in the public record section of your credit report will remain there for seven to ten years.

Debt Collections

If you have accounts that have become seriously delinquent, they may be sent to a collection agency whose sole purpose is to get you to pay the debt. Collection accounts are also detrimental to your credit. When you have collection accounts on your credit report, it sends the message that you don’t pay your bills on time.

Any type of financial account can be sent to a collection agency and included on your credit report. Even an outstanding library fine of $5 can make its way onto your credit report. To keep debt collections from appearing on your credit report, pay all your bills on time.

Credit Inquiry

Each time a business checks your credit report, a record is made of that “inquiry.” All your credit report inquiries are listed in a separate section. There are two types of credit inquiries. First, soft inquiries are made when you check your own credit report, when businesses you already have a relationship with check your credit report, or when businesses check your credit report to send you a promotional offer.

The second type of credit report inquiry is a hard inquiry. Hard inquiries are made when you apply for credit.

Some inquiries may not show up on your credit report depending on who’s checking it. If you’re checking your credit report, you’ll see all inquiries both soft and hard. On the other hand, when you make an application for credit, only hard inquiries will appear on that version of your credit report.

Lenders typically like to see fewer credit inquiries. Too many inquiries could mean that you’re taking on more debt than you can handle or that you’re desperate for credit.

All Three Credit Reports Won’t Be the Same

The three credit bureaus collect data independently of each other. Your creditors and lenders may only report your account to one or two of the credit bureaus. The impact is that not all your accounts will appear on all your credit reports. So, when you view all three of your credit reports at the same time, you’ll see that one report contains information that the other reports do not.

You have the right to an accurate credit report. If you find errors on your credit report, you can submit a credit report dispute to have the inaccurate information removed from your credit report.

Related posts:

1. 5 Reasons to Check Your Credit Report
2. How to Handle Credit Report Errors
3. How to Get a Free Credit Report

You have three credit reports, one from each of the three major credit bureaus – Equifax, Experian, and TransUnion. If you want to get a complete picture of your credit history, check all three of your credit reports. Not all creditors and lenders report to all three credit bureaus, so your credit reports will likely be different from each other. No matter which free credit report method you choose, make sure you check all three of your credit reports at least once a year.

Free Credit Report from AnnualCreditReport.com

In 2003, the federal government passed a law that grants you a free credit report from each of the three credit bureaus once a year. This free credit report is commonly referred to as your annual credit report. You can order your annual free credit report online, over the phone, or through the mail. Online is the quickest method, allowing you to view your free credit report immediately. Phone and mail requests for your annual credit report take up to three weeks to get your free credit report.

Ordering Your Annual Credit Report Online

To order your annual credit report online, simply visit AnnualCreditReport.com and follow the instructions on the site. You’ll be required to enter your personal indentifying information like your name, social security number, and date of birth. You might also have to verify your identity by answering questions about accounts that may appear on your credit report.

Be careful when you order your annual credit report online because there are many imposter websites that claim to give you a free credit report, but enroll you in a subscription credit monitoring service, then charging your credit card if you don’t cancel the trial. We’ll talk more about those types of services later.

When you order your free credit report online through AnnualCreditReport.com, you won’t have to enter a credit card number and there are no trial subscriptions to cancel. The credit report is absolutely free.

Ordering Your Annual Credit Report Via Mail and Phone

You might choose to order your annual credit report through the mail or over the phone.

To order your free annual credit report by phone, call 1-877-322-8228. You’ll be asked questions to verify your identity. Once you place your order, your annual credit reports will be mailed within 15 days.

To order your free annual credit report by mail, you need to download and fill out the request form. The form requests your social security number, date of birth, name, and previous and current mailing addresses. You must also indicate which of the three annual credit reports you would like to order. Once you’ve completed the form mail it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Once your form has been received, it can take 2-3 weeks to receive your annual credit report.

Enroll in a Free Credit Report Promotion

Type in “free credit report” in a search engine and you’ll get pages upon pages of results from companies that have free credit report promotional offers. These free credit reports are not part of the government-granted annual credit report offer, and may actually cost, if you’re not careful.

To get a free credit report, you must enroll in a trial subscription to a credit monitoring or identity theft monitoring service. Enrollment typically requires you to enter a valid credit card number. Your credit card number allows the service to begin charging you if you haven’t cancelled before the trial period ends. These trials last anywhere from 7 to 30 days. You must cancel during that time to avoid being charged for your free credit report.

These free credit report promotions vary in the number of credit reports you receive (1 or all three) and whether you receive a free credit score as part of the promotion. The cost of the credit monitoring service also varies, ranging from $9.95 per month to $29.95 per month. Make sure you know how much the service costs so you know what will be charged to your credit card if you don’t cancel in time.

Other Ways to Get a Free Credit Report

The Fair Credit Reporting Act (FCRA), a federal law that sets rules for credit reports, allows you to receive a free credit report in a few other circumstances:

• You can get a free credit report if you’ve had an application and the reason for denial was based on information in your credit report. The business is required to send a letter telling you why you have been denied and giving instructions for getting your free credit report.
• You can get a free credit report if you’re unemployed and about to start looking for a job.
• If you’ve been a victim of identity theft, you can receive a free credit report.
• Finally, consumers who are on welfare are entitled to receive a free credit report under the FCRA.

If you need a free credit report for one of the reasons above, contact each of the three credit bureaus to request your credit report.

Related posts:

1. 5 Reasons to Check Your Credit Report
2. What’s On Your Credit Report?
3. How to Respond to Credit Card Fraud

Why You Should Check Your Credit Report

To make sure the information in it is correct. Some statistics say most credit reports include some type of error. These errors can be relatively harmless like an incorrect address. They can also be extremely harmful, like a collection account that doesn’t belong to you. It’s common for fathers and sons who share names to end up with the other’s accounts on their credit reports.

There’s a dispute process you can go through to remove these credit report errors, but you have to find the errors first. The only way to know whether your credit report has the right information is to check it periodically.

To detect identity theft. Identity theft happens when someone uses your personal information to create new accounts in your name. Unfortunately, many identity theft victims don’t realize the crime has happened to them until bill collectors start calling and sending letters. Or worse, when they’re denied for credit cards and loans because these fraudulent accounts have gone delinquent.

You can detect identity theft sooner by watching your credit report throughout the year. Review your credit report and look for accounts that don’t belong to you or that you won’t remember opening. Use the credit report dispute process to remove these accounts.

So you know what lenders see when they review your report. Whenever you apply for a new loan or credit card, lenders will check your credit report to decide whether to approve your application. They may ask some questions about some of the accounts that appear on your credit report. If you don’t know what’s on your credit report, these questions can be a complete surprise. Before you apply for a new loan, check your credit report so you know what your lender is seeing about you.

To find out what’s influencing your credit score. Your credit score is based solely on the information that appears on your credit report. If you want to know what’s bringing your credit score down, the perfect place to look is your credit report. Most credit reports include a detailed analysis that tells you what information could be hurting your credit score.

Until you check your credit report, you can only speculate about what’s affecting your credit score. Seeing late payments, collection accounts, and other negative account information will confirm the things that are hurting your credit score.

To take inventory of who and how much you owe. The good thing about your credit report it’s an almost comprehensive list of all your debts. If you want to start paying off your credit card and other debt, your credit report is a good place to look to figure out who you owe and how much you owe them. Before you start paying off your debt, check your credit report and create a list of your outstanding debts.

Keep in mind your credit report may not contain all your debts, because some of your creditors and lenders may not report to the credit bureaus. For those debts, you might check your billing statements.

How to Check Your Credit Report for Free

The federal government recently passed a law that allows every consumer to get a free copy of their credit report from each of the three bureaus once a year. That means once every twelve months, you can order your Equifax, Experian, and TransUnion credit reports.

Three Ways to Get Your Annual Credit Report

While there are many sites on the internet that promise to give you a free credit report, there is only one site – AnnualCreditReport.com – that allows you to access your credit report with absolutely no strings attached.

At AnnualCreditReport.com, enter your personal information (name, address, social security number, etc.) and you’ll be taken to a page where you can view your credit report from each of the credit bureaus. When you order your annual credit report online, you can view it instantly.

You can also order your free credit report by mail, by filing out the request form and sending it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Finally, you can request your annual credit report by phone by calling 1-877-322-8228. It can take up to 3 weeks to receive your credit report when you order it by mail or phone.

Those Other Free Credit Report Websites

When you order a free credit report from any other website, you typically must enter your credit card number and agree to sign up for a free trial subscription to a credit monitoring service. If you fail to cancel the subscription before the trial ends, your credit card will end up getting charged each month until you finally cancel. If you decide to take advantage of one of these free credit report offers, make sure you cancel before the trial ends to avoid having your credit card charged.

If you want to watch your credit reports throughout the year, order only one of your three annual credit reports every few months.

Related posts:

1. How to Get a Free Credit Report
2. What’s On Your Credit Report?
3. How to Handle Credit Report Errors