Your credit impacts every part of your life, from where you can live to whether you can get a job. It’s a fundamental part of how companies determine if you’re a safe person to offer financing. A bad credit score can prevent you from renting or buying homes you can afford or opening a new credit card.
That’s why it’s essential to monitor your credit report carefully. If you regularly pay attention to your report, you’re more likely to spot irregularities before they can hurt your score. More importantly, you can figure out whether issues are simple mistakes or a sign of fraud. Here’s how credit errors and identity theft are different and how to tell them apart on your report.
Spotting Irregularities in Your Credit Report
Reporting agencies are legally required to offer you free access to your credit report through AnnualCreditReport.com once a year. You can also request free reports if:
- You’ve been denied a job, loan, insurance, or another benefit because of something in your report.
- You’re on public assistance
- You’re unemployed and looking for a new job
- You think or have been informed you’ve become a victim of identity fraud
You can monitor your score more regularly directly through the various agencies. It’s important to check your report and score regularly to ensure they are accurate.
To do so, carefully read through the report and look for irregularities. These are things like accounts, transactions, and events that you didn’t create or perform. For instance, if it lists an account you don’t know about, that’s an irregularity. Once you spot an issue like this, you can request that the agency issuing the report fixes it for you. However, to fix the problem for good, you need to determine whether it was the result of an error or fraud.
What Is a Credit Error?
Credit errors are just that: mistakes that made it into your report. There are many ways errors can occur, such as:
- Someone misreported information: Companies that communicate with credit agencies may enter your data incorrectly. So can the agencies themselves. These errors can be fixed by tracking down where the information was mistyped and correcting it.
- Someone failed to enter a payment: Another type of error occurs when an institution makes an accounting mistake. For instance, if you made a payment on an account, the institution needs to record it correctly, or it may believe that you have failed to pay on time. These errors require more effort to fix because you need to prove that you paid on time.
- Someone mistyped a name or social security number: If a person with a name or social security number similar to yours opens a new account, typos during the creation process may mean it winds up attached to your identity instead of their own. In this case, the account itself is incorrect and needs to be changed.
Basically, an error is an innocent mistake that has made its way onto your report. Many are easy to fix since they are usually simple bureaucratic typos, but they can still affect your life if you don’t take action.
What Counts as Identity Theft?
Identity theft or fraud is something completely different. Fraud occurs when someone uses your information to open accounts in your name without your permission. Common kinds of identity theft include:
- Opening new cards and failing to pay them back
- Accessing your bank account and draining it
- Using your information to get a job or pass a background check
When it comes to your credit, the most dangerous identity fraud is the kind that leads to new accounts. These accounts appear on your report and can dramatically impact your creditworthiness, especially if the fraudster fails to pay back the card.
How to Tell Whether a Credit Report Inconsistency Is an Error or Fraud
At first, errors and fraud can look very similar on your report. If you spot a new account that you don’t recognize, it’s not always clear whether it was a simple mistake or something more dangerous.
- Look for other errors: In most cases, an error will be the only strange thing on your report. Since errors are usually a single typo or missed detail, everything else should look correct. If you spot more than one inconsistency, you’re probably facing fraud instead of a single mistake. Multiple irregularities that appear around the same time may be a sign that someone is targeting you specifically.
- Report the irregularity to the agency and freeze your credit: Whether or not you think the issue was fraud or an error, you should report the problem to the agency. They should be able to fix simple mistakes quickly and help you remove fraud from your report. You should also freeze your credit, just in case.
- Monitor your report closely: Now you can watch to see if the irregularity reappears or if someone tries to open new accounts. An error that comes back is usually a sign that someone is reporting incorrect information to the agency, which may mean you need legal help to get it fixed. On the other hand, if someone tries to open new accounts despite your frozen credit, you’re definitely a victim of fraud, and the agencies should help you secure your identity.
Fix Your Credit Report with the Law Offices of Todd M. Friedman, P.C.
Both fraud and errors can seriously damage your credit. That’s why you need to stay on top of your reports and respond to irregularities as quickly as possible. Otherwise, you may miss out on important opportunities because of the false data.
If you’re facing a consistent credit error, you can get legal help to force the agencies to stop reporting false information. That’s where the expert team at the Law Offices of Todd M. Friedman, P.C. can help. You can get in touch by calling 323-973-2504 or sending a message online to learn more about how our qualified attorneys can help you dispute credit errors and fight for more accurate reports.
