Every time I check my credit report, I wait for it to load with bated breath. I know being enrolled in credit monitoring has me covered on a daily basis, but you never know, right? One of these days, I could find a bunch of incorrect information splattered across my file.
And I’m not alone. At Credit Karma, members often approach us with concerns about a possible error on their report, wanting to know if they should be worried and how they should handle it. They certainly have reason to feel uneasy. As we talked about previously, last year the Federal Trade Commission found that one in four consumers had errors on their credit reports that could affect their scores.
Fretting about potential inaccuracies on your report is no fun. Here, we’ll discuss common errors you might find on your credit report, what they mean for your credit and what you can do about them.
1. Incorrect names or addresses.
Say you spot an address you’ve never lived at or a name you’ve never gone by on your report. This could just be a clerical mistake by one of your creditors, or someone could be applying for credit with your Social Security number. Names and addresses are generally reported to the credit bureaus by lenders when someone applies for credit, though your credit report may or may not include all the names and addresses you’ve used.
Should you be concerned? That depends. An incorrect middle initial on your records most likely isn’t going to spell failure for any of your credit applications. However, if there’s a name and address that look unfamiliar to you, it could be a sign of identity theft, and you’ll want to check your reported accounts next. You can contact your creditors and the bureaus about this situation, but bear in mind that creditors aren’t required to investigate incorrect personal details.
2. Unfamiliar accounts.
If you find accounts on your credit report that you have no recollection of opening, you might want to report them right away. This may mean someone has successfully used your information to open an account and sensitive personal details, like your Social Security number, may have been compromised. Depending on the state of these accounts (are they rife with late payments?), these fraudulent accounts could potentially damage your credit reputation, as well. You can contact the creditors first to check their records and use any helpful information they provide when you dispute directly with the bureaus.
3. Account details.
If the specifics of your account, like your credit limit or payment history, are off-base, something may have been missed in translation. These mistakes could be affecting your credit score because credit utilization and payment history are usually weighted pretty heavily. You should also watch out for accounts that are reported as “open,” but are paid off and should be reported as “closed.” These details demonstrate how well you handle your credit, and it’s up to you to make sure they’re in order.
4. Paid-off delinquent debt.
Many people assume that if you have a public record for a past-due debt, the record will automatically fall off once you pay off the debt. Unfortunately, this isn’t the case. Most debt sticks around on your credit for up to seven to ten years. (The time period depends on the type of debt, so check with a certified professional, non-profit group or the credit bureau to set your expectations appropriately.) However, if the public record has indeed expired, you do have the right to file a dispute. Public records negatively affect your credit score, so you don’t want them on your report any longer than they should be.
Taking care of mistakes — minor and significant — on your credit report can be a headache. If this is the first time you’re reporting a mistake or if it’s been a while since you’ve had to, check out our walk-through on the dispute process. It takes time and energy to contact your creditors and the bureaus, but you should give yourself a pat on the back for making the effort. Being proactive now should help your financial health in the long run.