Credit Report Errors Are A Huge Consumer Grievance – How To Fix Them
Consumers filed complaints with the Consumer Financial Protection Bureau in record numbers in 2020, according to a report released Monday by the US Public Interest Research Group, a nonprofit consumer advocacy group. Credit reporting issues were cited in 282,000, or 63%, of complaints. The majority noted “incorrect information” on credit reports or “the information belongs to someone else,” according to the report.
Not only are complaints about credit report errors at the top of the list of consumer grievances, but the three major credit bureaus – Experian EXPGY,
and Equifax EFX,
– were the three main companies complained of.
Mistakes Can Put Your Credit Score at Risk
Accuracy is important because credit report errors can suggest identity theft or fraudulent activity on your accounts. And because credit report data is the raw material for credit scores, mistakes can lower your score.
Some of the complaint volume may be an unintended consequence of payment accommodations mandated by the 2020 Coronavirus Relief Bill and temporary concessions offered by lenders and credit card issuers.
But credit report errors were common even before the pandemic, says Ed Mierzwinski, senior director of the advocacy group’s federal consumer program and author of the report. Payment accommodations may have led more people to check their credit reports and find these errors, he says.
Mierzwinski recommends that “any consumer with a credit account” check their credit reports. People who have common names can be particularly at risk of confusion, he says.
How to get your credit reports
You can get free credit report from each of the three major credit bureaus using AnnualCreditReport.com. You will be asked to provide personal identifying information – your name, social security number, date of birth, and address.
You will also be asked security questions to verify your identity. Some of them can be difficult. If you are unable to answer correctly, call 877-322-8228 to request your credit reports by mail.
You can also download and send a application form at: Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281.
How to read your credit reports
Your reports from the three offices will not be exactly the same. Not all creditors fall under all three and bureaus present information in different formats. But you can use a similar procedure to read your credit reports.
First, verify your credentials. Mistakes like misspellings from a previous employer don’t matter, but something like an address you’ve never lived at might suggest identity theft.
Then verify the account information. Every credit account you have (and some that are closed) should be listed and include:
Name of the creditor, account number and date of opening.
Type of account (credit card, loan, etc.).
Account status and if you are up to date on payments. Accounts that were in good standing when the pandemic-related payment accommodations began must continue to be reported in this fashion until the accommodations are completed.
Whether you are joint account holder, primary user or authorized user.
Credit limit and / or original loan amount.
There may be negative information, such as collection accounts or bankruptcy records. Make sure you recognize it and that it is correct.
How to dispute errors
The Fair Credit Reporting Act holds both the creditor reporting to the credit bureaus and the credit bureaus responsible for ensuring that the information in your credit reports is accurate.
If you spot an error in one credit report, check it in the other two. dispute the error with each office that reports it. You can dispute by mail, over the phone, or online – the credit report will include information on how to file your dispute. The credit bureaus should investigate and notify you of the result.
You can also contact the company providing the incorrect information. He should notify the litigation bureaus and, if he finds that the information was wrong or incomplete, ask the credit bureaus to remove it.
If the challenge does not resolve the problem, Mierzwinski recommends filing a complaint with the CFPB and requesting an investigation. This can bring additional pressure to correct misinformation, he says.
CFPB Acting Director Dave Uejio said one of his goals is to “ensure that consumers who submit complaints to us get the response and relief they deserve.”
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Bev O’Shea writes for NerdWallet. Email: [email protected] Twitter: @BeverlyOShea.