How to spot five common credit report errors
Posted on October 20, 2016.
Common Credit Error 1: Identity errors on your credit report; wrong accounts on your credit report
Sometimes a credit bureau will get your personal information or account information wrong. The three major credit reporting bureaus, Equifax, Experian and TransUnion, maintain their own database of consumer data, including personal information, account information, and payment history. The bureaus include your personal information in your credit reports. Serious errors, such as accounts that don't belong to you or fraudulent accounts on your credit report can have a negative impact on your overall credit while others may not affect your credit at all.
Surprisingly, even current accounts or accounts in good standing that appear on your credit report but do not belong to you can negatively affect your credit score if it raises your credit utilization rate. Your open credit card utilization ratio or credit utilization rate is the amount owed on your credit cards as a percentage of the credit limits. A mixed file can raise your credit utilization ratio and make it seem like you are using more credit than you actually are. This can negatively impact your credit score.
How to remove a mixed file or incorrect account from your credit report.
You can dispute instances of mistaken identity by writing the credit bureaus and providing proof of your identity as well as supporting documentation proving the account does not belong to you, such as proof of your address. We are happy to help you remove these accounts by preparing the appropriate disputes with the credit bureaus.
Common Credit Error 2: Incorrect account information on your credit report
Banks, credit card companies, and lenders that provide information to the credit bureaus are known as, "furnishers of information." Sometimes the furnisher providing information about you to the credit bureaus gets things wrong. Other times, the credit bureau incorrectly processes the information provided by the furnisher.
For instance, credit card accounts might display an incorrect credit limit or balance, or incorrect payment history. Closed accounts or accounts may report as “open” when they are in fact closed, or have been paid in full. Incorrect account information can lower your credit score fast. It is important to monitor your credit to ensure these errors do not appear on your report.
Common Credit Error 3: Fraud accounts appearing on your credit report (Identity Theft)
Another common credit error is when someone fraudulently uses your information to open an account. This can happen to victims of identity theft, or when someone you know uses your name and personal information open a credit account.
Identity theft can lead to serious credit report errors since these accounts will almost always be late and unpaid. Victims of identity theft should notify the credit bureaus immediately and put a security freeze into place. A security freeze will prevent you or anyone posing as you from opening new lines of credit while you restore your identity.
Common Credit Error 4: Negative accounts more than 7 years old appearing on your credit report
Under the Fair Credit Reporting Act, credit bureaus are supposed to remove negative accounts from your credit report after 7 years. You should check to make sure that your credit report does not contain negative account information that is more than 7 years old.
Included below is a summary below of some common credit reporting time limits:
*A single late payment is deleted at seven years. If there was a series of late payments (not paid at 30 days, or 60 days, or 90 days) and then brought current, the payments would be deleted seven years from the first one missed in the series. If the account was never brought current and charged off and placed for collection, the entire account will be deleted based on the date the account became late and was never again current. This is known as the original delinquency date.
Common Credit Error 5: Debt discharged in bankruptcy on appearing on your credit report
Sometimes, debt discharged in bankruptcy will show up on your credit report as an open account, or an account with a balance. This is an increasingly common credit error. After debt is discharged in bankruptcy, the bankruptcy public record can remain on your credit report for up to ten years. However, the individual accounts can only be reported for seven years. After the bankruptcy discharge, accounts included in bankruptcy should be reported as closed, having a zero balance, and discharged in bankruptcy.
If you believe you have one or more of these errors on your credit report please contact us by using the contact form at the bottom of our website, or by emailing Nick Hadous at: nhadous@hadousco.com.
Posted on October 20, 2016.
Common Credit Error 1: Identity errors on your credit report; wrong accounts on your credit report
Sometimes a credit bureau will get your personal information or account information wrong. The three major credit reporting bureaus, Equifax, Experian and TransUnion, maintain their own database of consumer data, including personal information, account information, and payment history. The bureaus include your personal information in your credit reports. Serious errors, such as accounts that don't belong to you or fraudulent accounts on your credit report can have a negative impact on your overall credit while others may not affect your credit at all.
Surprisingly, even current accounts or accounts in good standing that appear on your credit report but do not belong to you can negatively affect your credit score if it raises your credit utilization rate. Your open credit card utilization ratio or credit utilization rate is the amount owed on your credit cards as a percentage of the credit limits. A mixed file can raise your credit utilization ratio and make it seem like you are using more credit than you actually are. This can negatively impact your credit score.
How to remove a mixed file or incorrect account from your credit report.
You can dispute instances of mistaken identity by writing the credit bureaus and providing proof of your identity as well as supporting documentation proving the account does not belong to you, such as proof of your address. We are happy to help you remove these accounts by preparing the appropriate disputes with the credit bureaus.
Common Credit Error 2: Incorrect account information on your credit report
Banks, credit card companies, and lenders that provide information to the credit bureaus are known as, "furnishers of information." Sometimes the furnisher providing information about you to the credit bureaus gets things wrong. Other times, the credit bureau incorrectly processes the information provided by the furnisher.
For instance, credit card accounts might display an incorrect credit limit or balance, or incorrect payment history. Closed accounts or accounts may report as “open” when they are in fact closed, or have been paid in full. Incorrect account information can lower your credit score fast. It is important to monitor your credit to ensure these errors do not appear on your report.
Common Credit Error 3: Fraud accounts appearing on your credit report (Identity Theft)
Another common credit error is when someone fraudulently uses your information to open an account. This can happen to victims of identity theft, or when someone you know uses your name and personal information open a credit account.
Identity theft can lead to serious credit report errors since these accounts will almost always be late and unpaid. Victims of identity theft should notify the credit bureaus immediately and put a security freeze into place. A security freeze will prevent you or anyone posing as you from opening new lines of credit while you restore your identity.
Common Credit Error 4: Negative accounts more than 7 years old appearing on your credit report
Under the Fair Credit Reporting Act, credit bureaus are supposed to remove negative accounts from your credit report after 7 years. You should check to make sure that your credit report does not contain negative account information that is more than 7 years old.
Included below is a summary below of some common credit reporting time limits:
- Open accounts with no negative payment history: indefinitely so long as they are open and active.
- Closed accounts with no negative payment history: 10 years from the date they are closed.
- Accounts with late payments/negative items: 7 years from the original delinquency date.*
- Collection accounts: 7 years from the initial delinquency date of the original account. For credit reporting purposes, collection accounts are treated as a continuation of the original debt.
- Chapter 13 bankruptcy: 7 years from the filing date.
- Chapter 7 bankruptcy: 10 years from the filing date.
- Civil judgments: 7 years.
- Unpaid tax liens: 10 years from the filing date.
- Paid tax liens: 7 years from the paid date.
- Credit Inquiries: 2 years from the inquiry date.
*A single late payment is deleted at seven years. If there was a series of late payments (not paid at 30 days, or 60 days, or 90 days) and then brought current, the payments would be deleted seven years from the first one missed in the series. If the account was never brought current and charged off and placed for collection, the entire account will be deleted based on the date the account became late and was never again current. This is known as the original delinquency date.
Common Credit Error 5: Debt discharged in bankruptcy on appearing on your credit report
Sometimes, debt discharged in bankruptcy will show up on your credit report as an open account, or an account with a balance. This is an increasingly common credit error. After debt is discharged in bankruptcy, the bankruptcy public record can remain on your credit report for up to ten years. However, the individual accounts can only be reported for seven years. After the bankruptcy discharge, accounts included in bankruptcy should be reported as closed, having a zero balance, and discharged in bankruptcy.
If you believe you have one or more of these errors on your credit report please contact us by using the contact form at the bottom of our website, or by emailing Nick Hadous at: nhadous@hadousco.com.