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Credit Report Errors are Widespread

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Credit reports are important to most consumers, because they often determine the interest rates that you receive on mortgages, car loans and other loans.  If you have bad credit, you may not be able to get that home or car you were hoping for.  Bad credit reports can also prevent you from getting a job, or a security clearance.

However, many consumers don’t realize that their credit reports can contain false or misleading information.  According to a study published earlier this year by the Federal Trade Commission, 20% of consumers had errors on at least one of their credit reports.  For about 10% of those consumers, the error had a noticeable impact on their credit scores.  Considering that the three largest credit reporting agencies (credit bureaus) maintain files on about 200 million Americans, this means that an astounding 40 million Americans had errors on their credit reports!

One of the major problems is that errors can be very difficult to correct.  For example, a 60 Minutes report earlier this year contained several examples of people affected by errors in their credit reports.  Here are some suggestions about what you can do to ensure your credit report is accurate:

  • Order your credit report annually from the three major credit bureaus: Equifax, Experian and TransUnion.  You are entitled to at least one free credit report annually from each of those credit bureaus.  The easiest way to order your credit report is to go to the official website:  Beware of other websites that claim to provide free credit reports, as they often require you to sign up for other services that will cost you money.
  • Review your credit report to ensure all the listed account were actually yours, and that the information is accurate.
  • If you find errors in your credit report, dispute them with the specific credit bureaus that had the errors in their report.  The credit bureaus encourage you to submit your dispute online, but I generally recommend that you send them a letter explaining the error, attach supporting documentation, and ask them to fix it.
  • Make sure to follow up with them to ensure the error is fixed, and does not resurface later.

Under the Fair Credit Reporting Act, the credit bureaus are required to conduct a “reasonable” investigation of any disputes that you properly report to them.  However, that doesn’t always occur.  Sometimes, the credit bureaus don’t conduct a reasonable investigation.  Sometimes, the credit card company or other creditor doesn’t report it accurately.  We have uncovered that sometimes the creditor does not even have a person review the dispute, but simply uses a computer to respond.  If this happens to you, the Fair Credit Reporting Act allows you to sue them for your damages, which could include the extra interest you paid due to the credit report error.  If you have questions about your credit report, please contact us for a free consultation to determine your rights: call us at 386-444-3032 or click here to send us an email.