Good credit is crucial to keeping your finances in order. You put in the work to pay your bills on time and keep your credit score high. The problem is that you can only do so much to protect your financial reputation. Sometimes, your score will take a dip when you haven’t done anything. That may mean that your report contains one or more credit errors.
Credit errors are problems with your credit report. If a creditor uses the wrong information or there’s a typo, your financial report can suffer for no good reason. Luckily, you can fix most credit errors. Keep reading to learn about credit reports, errors, and how to get common errors fixed.
What Is Your Credit Report?
Your credit report is home to one of the most critical numbers in your life: your credit score. Your score dictates everything from the interest rate you can get a mortgage or a car loan to whether you can get an apartment or loan at all. Scores are decided based on six main factors found in your report:
- History of on-time payments
- Usage
- Average account age
- Total number of credit accounts
- Inquiries
- Derogatory marks
It’s essential that all of these elements are correct, or your score will be inaccurate. Here are the five most common types of errors you might find and the best way to fix them.
1. Incorrect Identity Information
On occasion, your report may contain incorrect information about who you are. This can include the wrong name, date of birth, address, or even social security number. This is uncommon, but it’s highly problematic. When your identifying information is wrong, it’s easy for your report to get mixed up with someone else’s. That can lead to problems with your finances for life.
Your identifying information can be incorrect for two reasons. First, if a card or loan agency supplied inaccurate data to the credit bureau, then the bureau will have that information wrong. Second, if you’re a victim of fraud, the fraudster may have accidentally used incorrect information connected to your accounts.
Luckily, all three agencies offer ways to update your personal information in your report. The simplest solution is to update your information with your creditors and let this filter up to the bureau. The alternative is to call the bureau with incorrect information and ask them how to update your report.
2. Balance Errors
The balance on your accounts affects things like your credit usage. An incorrect balance on one of your accounts can lead Equifax, TransUnion, or Experian to report your usage as higher than it is and lower your score.
Incorrect balances can come about in a couple ways. The most common is that the balance was misreported by your creditor or mistyped by the person entering the amount. The more sinister reason is that it’s not a typo at all, and you’re a victim of fraud.
Before you try to fix a balance error, make sure it’s truly an error. Go to the creditor’s website and check your balance there. If it matches the amount on your report, then there’s no mistake. Someone has stolen your information. Report the fraud immediately.
If it is an error, then you can simply dispute the balance on your report. Go to the bureau’s website, identify the incorrect balance, and provide a copy of the actual balance report from your creditor.
3. Incorrect Account Status
The number of open accounts you have is a significant factor in your score. Just as important as the number of accounts that are listed as late or delinquent. Suppose your report lists closed accounts as open or shows that you’re late paying an account when you pay on time. In that case, your score may suffer dramatically.
You need to work with the reporting agency immediately to get this fixed. Often it’s just a clerical error or a miscommunication. File a dispute with the bureau with creditor proof that the account is closed or that you’ve paid on time. The bureau will investigate and update your report with the new information it finds. If it refuses, it’s time to get a lawyer to help you get your report fixed.
4. Data Management Problems
Data management problems are typically the result of miscommunications between the bureaus and creditors. A data management error is any type of mistake that’s caused by problems within a computer system. For example, if you’ve corrected a balance or account status and it returns to the incorrect state, something has gone wrong in the system.
This may take a little work for the bureau to fix, but that’s not your responsibility. To get the problem resolved, report it to the bureau like you’d report incorrect account statuses or balances. Just make sure to follow up regularly to guarantee that the problem doesn’t crop back up. If it does, then you may need to take legal action.
5. Unknown Transactions
The more dangerous kind of error is accounts or debts that you don’t know about. These types of transactions are one of the most likely signs of fraud. If you spot accounts that aren’t yours on your report, reach out to the bureau immediately.
The bureau will be able to tell you more about the account or debt. Rarely, a charge may be mistakenly listed on your report because of your own or someone else’s incorrect personal information. In most cases, though, it’s the result of someone else maliciously using your financial information to open accounts.
You can file a dispute either way. It’s also a good idea to freeze your credit to prevent any new accounts from being opened in your name until the agency has figured out the problem. Last, start working with an attorney so you can get the situation resolved more quickly.
Protect Your Credit and Reputation
Your credit is essential to your quality of life. If you’re facing credit errors and the bureaus aren’t fixing them, stand up for yourself. Reach out to an experienced consumer protection attorney to discuss your case. The right lawyer will help you convince the bureaus to fix your score for good. Don’t let someone else’s simple mistake ruin your finances. Fix credit errors when they pop up and keep your score right where it belongs.
