A 2004 U.S. government study on the accuracy of credit reports found that 25% of reports contained serious errors, such as false delinquencies and accounts that that did not belong to the consumer. 54% of credit reports contained misspelled, outdated, or inaccurate personal data like name, address, and employer. 22% listed the same mortgage or loan twice. Altogether, 79% of the credit reports surveyed included serious errors or mistakes of some kind.
So how do errors like these find their way onto your credit reports? Here are a few ways mistakes can happen:
Errors in personal information
- Your creditor or bank may be reporting an incorrect name, Social Security number, or other piece of personal identifying information about you to the reporting agencies.
- Your file is mixed with someone else’s who has a similar name, Social Security number, or date of birth, or with someone who lives or lived at your same address (like a family member or roommate).
- An identity thief has attempted to change some of your personal information with your current creditors or has contacted new creditors using a portion of your identifying information.
Errors related to an account
- Your bank or creditor reports inaccurate information about your account standing or payment history to the reporting agencies.
- The reporting agency doesn’t purge obsolete negative information (like delinquencies and collections accounts) as it should.
- Accounts are inaccurately listed as being in collections.
- Data mis-entry by the information provider or credit reporting agency can lead to errors.
- A loan is listed twice because it is serviced or sold to another organization.
- Accounts that were closed by the consumer are still being reported as open to the reporting agency.
- An identity thief has opened new accounts in your name.
- Inaccurate public records data appears on your report because your name or other pieces of personal information match someone else’s.
- Repositories fail to record that a legal judgment has been paid, and it therefore is not reported to the credit reporting agencies correctly.
- The reporting agency hasn’t removed obsolete public records from your report after seven years (certain types of bankruptcies and unpaid liens are legally allowed to stay on your report up to ten years).