How to deal with errors on credit reports
Have you ever been turned down by a lender, only to discover later that an error in your credit report was at fault? Simple errors in your credit report can have huge consequences, and given the sheer volume of credit report complaints handled by the Consumer Financial Protection Bureau (CFPB) there are far too many Americans potentially being harmed by incorrect assessments of their credit risk.
LendEdu reviewed the cumulative 2016 complaints reported to the CFPB as listed in the CFPB’s Consumer Complaint Database and found that 43,206 (23.2%)of the 186,494 complaints listed involved credit reporting — the topic with the highest number of CFPB complaints for the year.
Within the category of credit reporting, the large majority of complaints were for incorrect information on the credit report (almost 74% of all credit reporting complaints). Of those complaints, 34.5% reported that the information listed was not theirs. Other complaints included incorrect account status (30.2%), incorrect account terms (10.5%), and incorrect public record information (8.6%). In some cases (7.9%), previously deleted information had been reinserted.
These are simply reports, and there are no assessments of how many of those claims are true — but the numbers are still cause for concern.
What should you conclude from this report? It pays to check your credit report for any errors. Keep in mind that the CFPB numbers only involve mistakes that people caught through checking their credit report — or worse, trying to find out after the fact why a potential loan or transaction ran into problems.
It’s important to check all three credit bureaus (TransUnion, Equifax, and Experian), because the error may be isolated to only one bureau. You can see your credit scores and get credit reports from all three bureaus right now by signing up for the Credit Manager by MoneyTips.
When you find an error, notify the individual credit bureau of any errors in writing and include copies of any necessary documents that support your position. Don’t stop with the credit bureau, but also investigate the source of the false information. April Lewis-Parks, Director of Education and Public Relations with Consolidated Credit, suggests that you check the account listing in the credit report for a phone number or other contact information to allow you to contact the creditor directly. “If you can’t find a phone number,” says Lewis-Parks, “...research [the company] online.” If you find errors in your report, Credit Manager by MoneyTips has Action Buttons available that can easily alert many creditors and the credit bureau. The bureau must investigate your claim in a timely manner (typically within 30 days).
Ultimately, you should provide the information provider with written correspondence and copies of any supporting documents. If the information provider continues to provide the incorrect information, they must notify the credit bureaus of your dispute. If you are proven right, the information provider has to direct the credit bureau to correct or delete the information.
If you can’t resolve the issue with the credit bureaus and/or the information provider, contact the CFPB with your complaint. Make sure that you supply copies of the same supporting documents as evidence.
Quick action is important when dealing with erroneous credit reports. In Lewis-Parks’ words, when your credit report contains an error, “…you should act and try to fix it, don’t just let it go.” Even if credit report errors are not causing problems for you now, they may in the future, and the problem could compound over time.