Check for credit report errors before applying for a mortgage or vehicle loan.
If you don’t, credit report errors can cost you time and money.
It isn’t as uncommon as you’d believe. According to a Consumer Reports investigation, more than one-third of Americans (34%) discovered one or more credit report errors. Between February 1 and April 1, Consumer Reports asked 5,858 volunteers to obtain a copy of their credit report and check for any mistakes.
Personal information mistakes were discovered by 29% of respondents! Account information errors were discovered by 11%.
Mistakes about personal information may not always affect your credit score, but they could make accessing your credit report more difficult or impossible. Credit report errors, on the other hand, can harm your credit score.
That three-digit credit score influences your ability to obtain loans, such as a mortgage, as well as the interest rate you will pay.
The Response to the Credit Report Error investigation
In reaction to Consumer Reports’ findings, the Consumer Data Industry Association, which represents the main credit reporting corporations Equifax, Experian, and TransUnion, issued a lengthy statement. It labeled the piece “totally inaccurate and deceptive,” and claimed that the industry’s accuracy record is 98 percent.
According to the statement, “accuracy is the backbone of the credit reporting industry, and getting credit reports correct for customers is our most critical task.”
Consumer Reports isn’t the only group that publishes erroneous information related to credit report errors.
According to a 2012 research by the Federal Trade Commission, 25% of Americans have a credit report error.
Debt collectors aren’t out of the hot seat either. Debt collectors break the law more often than you think. When a debt collector calls you, you may wonder if the debt collector is legitimate, if the debt is yours, or if the amount the collector is seeking to collect is true. You must be vigilant.
The greatest thing you can do is use a free (and vetted) credit tracker to keep track of your credit reports. Equifax, Experian, and TransUnion provide free annual credit reports.
How to correct errors on your own credit report
Write a letter directly to the reporting firms if the inaccuracy involves your personal information and prevents you from viewing your credit reports online or by phone.
Include proper identification, such as your driver’s license, as well as verification of your address, such as a bank or utility statement. Any financial information can be blacked out, he said.
Other errors will require you to file a dispute with each credit reporting agency in order to get them fixed. Explain what needs to be fixed and why in writing, along with the account number. (Template letters can be found here.)
Include your full name and address, as well as a copy of your credit report with the disputed item circled or underlined, and the credit reporting firm’s dispute form, if it has one. It’s also crucial to send copies of supporting papers, such as credit card or bank statements, and to keep track of what you send.
Notify the company as well, and send the same information to them. (Template letters can be found here.)
To ensure a paper trail, the FTC suggests mailing all materials by certified mail. Credit reporting agencies have around 30 days to investigate your claim. They’ll also send your evidence to the company that submitted the information, which will have to look into it and report back.
If the dispute results in a change, the credit reporting firm must notify you in writing and provide you with a free copy of your credit report. If your dispute isn’t resolved, you can request that a statement of the dispute be included in your credit file and in all future reports.
If you lose the dispute, you can file again, but Consumer Reports advises that you include more information. Simply resubmitting the dispute could result in it being refused.
If your second attempt fails, Consumer Reports suggests filing a complaint with the Consumer Financial Protection Bureau’s website. If the matter is serious, you should consult a lawyer who specializes in this area. If you don’t know where to start, you can look for a lawyer on the website of the National Association of Consumer Advocates.
Finally, disputing your own credit report errors isn’t always a simple procedure.
In truth, repairing your credit report can be quite difficult depending on your own situation.
This is because the credit reporting system was not designed with consumers in mind. He said that it was developed for the companies that use it.
If you find credit report errors on your credit file and think you may need to hire a professional, click here to schedule a free credit consultation or click here to learn more.
Our credit reporting system doesn’t make it easy for consumers, and that’s unfortunately by design. This system isn’t kind to consumers, and it isn’t beneficial to consumers. It was never meant to be.