Reasons for mistakes on your credit report

Credit report errors occur for a number of reasons but they can all have a negative impact on your eligibility for any future credit. It's important to stay on top of your credit report to avoid any mistakes made by the creditors and credit bureaus —Equifax, Experian and TransUnion. Some common reasons for credit report errors include: 

• The individual has applied for credit under several different names (i.e. John Doe and Jonathon Doe)
• Someone made a clerical error in entering or reading information (names, social security numbers, addresses, etc.) from a handwritten application.
• Mix ups with common names. For example, there is likely more than one John Smith living in New York City and often there is the chance that information intended for one John Smith might appear on another John Smith's credit report as he applies for a mortgage.
• The individual gave an inaccurate Social Security number or the number was misread by the creditor.
• Loan or credit card payments were inadvertently applied to the wrong account.

TransUnion security breach is the latest in a series of high profile data compromises.
Click Here to read the story in Computerworld.

Credit scoring – how does a lender use your credit score to determine your “credit worthiness”?
Read the story in MSN news.

Microsoft nails offenders who used Microsoft’s logo for e-mail “Phishing” scam.
Read the story in Yahoo news.

4 out of 5 credit reports found to have errors
Click here to read the CBS article.

February 17, 2005 - BREAKING NEWS! CHOICEPOINT MASS ID THEFT RING DISCOVERED, 140,000 CONSUMERS AFFECTED.
ChoicePoint's databases contain 19 billion public records, including driving records, sex-offender lists and FBI lists of wanted criminals and suspected terrorists.
Click on the link to read the CNN story.

http://money.cnn.com/2005/02/17/technology/personaltech/choicepoint/

No matter what the reason, the erroneous information could reflect poorly on your credit file, thus causing approval problems when the time comes to apply for a job or obtain a manufactured home mortgage loan. If you find errors, no matter how small, be sure you get them fixed, and make sure that you contact all three credit bureaus with your change.

Common Credit Report Mistakes Could Cost You

If you haven´t requested a copy of your credit report, there are many reasons why you should.

A 2004 study by the National Association of State Public Interest Research Groups revealed that almost 79% of all credit reports contain some type of error. One-fourth of credit reports contain such serious errors that those individuals could be denied credit.

What are the common errors?

1) Misspelled names
2) Wrong Social Security numbers
3) Inaccurate birth dates
4) Inaccurate information about a spouse
5) Out-of-date address
6) "Closed" accounts listed as "open"
7) The same mortgage or loan listed twice
8) Absence of major credit, loan, mortgage, or other accounts that could be used to demonstrate creditworthiness

How can these errors happen?

Most mistakes can be pinned to creditors who provide inaccurate information to credit bureaus. Mistakes happen when credit accounts change hands. Other mistakes simply are human error. One report found that some banks admit to not providing credit bureaus with complete information about their customers. Some errors are the result of thieves stealing your personal information and establishing fraudulent accounts in your name.

Why should you care?

Lenders use credit reports to determine the interest rates on loans; the more creditworthy you appear on paper, the lower the rate you pay. Errors may cause you to pay more. In some cases, you even could pay a higher premium for auto and homeowners insurance, because insurance companies have found that people with poor credit histories tend to file more claims. And many people are surprised to learn that a potential employer turned them down for a job because of negative information on their credit report. Federal law, however, requires that the employer get your permission before pulling your report.

How much does a credit report cost?

A new federal law requires each of the "big three" credit reporting agencies—Experian, Equifax, and TransUnion—provide consumers with one free credit report per year. Go to annualcreditreport.com, or call 877-322-8228. If you want your credit score, a three-digit assessment of your creditworthiness, you´ll pay $7 to $9.

What if you find an error?

Write a letter to the credit bureau, which is obligated by law to contact the creditor who supplied the disputed information. The credit bureau must respond to you within 30 days. If you´re not satisfied with how the dispute is settled, ask that a brief written explanation be added to the bottom of your credit report.

Credit Links

www.ftc.gov
Information from the government on many consumer related issues.

Fair Credit Reporting Act Statutes
The complete text of the Fair Credit Reporting Act (FCRA).

When is a “Free” Credit Report not really free?
Read this FTC press release and note that the authentic website to visit for free credit reports iswww.annualcreditreport.com.

http://www.ftc.gov/opa/2005/08/consumerinfo.htm

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