1 out of 5 Americans Has an Error on Their Credit Report
According to the FTC, a study it concluded in December 2012 found that 26 percent of consumers reported a potential material error on one or more of their three reports and filed a dispute with at least one credit reporting agency and half of those consumers experienced a change in their credit score. Credit report errors can come in many forms (mistaken identity, information of someone else merged into another consumer’s credit report, public record errors, inaccurate or stale collection accounts, identity theft, inaccurate employment reports, and more).
Mixed Credit Information/Mistaken Identity
This occurs when someone else’s credit information is showing up in another consumer’s credit file. Unfortunately, this can commonly occur when the consumer’s information may be similar to the other persons, such as similar names, junior/seniors, similar or the same birth dates, or similar social security numbers. Despite the fact that the credit reporting agencies know about this and have the resources to ensure mixed credit information does not occur, it does.
When an imposter steals someone’s identity and opens up fraudulent accounts, those fraudulent accounts show up on the victim’s credit reports, often times showing derrogatories, charge offs, and other negative information causing a credit score to plummet. Both the creditor and the credit reporting agencies have duties not to report information they know or should know is inaccurate. They also have a duty to conduct a reasonable investigation to remove this false information. Over the years, we have helped many consumers in these very stressful times to ensure their credit reports are accurate.
Inaccurate or Stale Collection Accounts
Another source of credit report errors occurs when the furnisher or the credit reporting agencies (or both) report inaccurate information regarding collection accounts. For example, a consumer timely paid the balance but the credit report falsely shows that the consumer was delinquent. Another example would be if derrogatory information stayed on the credit report longer than it should. In most instances, derogatory information must come off the credit report after seven to ten years.
Public Record Errors
Public records can take the form of mortgage loan information, judgments, lawsuits, tax liens, and bankruptcies. If this information is false, it can have a very negative impact on a consumer’s credit score.
Inaccurate Employment Records
More and more companies are screening job applicants and running an employment background check. This can lead to severe problems if the employment background check has false or stale information about the job applicant. For example, it is not uncommon that the background check comes back with information about another individual that may have been arrested. Another example is if the job applicant did have an arrest, but it was more than seven years ago, yet it is still showing up on the credit report. In instances like this, the applicant can lose out on the job opportunity.
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