Your credit report plays a crucial role in your financial life. It influences everything from loan approvals to interest rates and even job opportunities. But what if your credit report contains errors? Even small mistakes can have a major impact, lowering your credit score and making it harder to secure credit, housing, or employment.
Unfortunately, credit report errors are more common than you might think. A study by the Federal Trade Commission (FTC) found that one in five consumers has an error on their credit report. In this article, we’ll highlight five of the most common credit report errors, explain how they can affect your financial future, and show you what to do if you spot a mistake.
1. Incorrect Personal Information
How It Happens
Credit reports contain basic personal details such as your name, address, date of birth, and Social Security number (SSN). Errors in this section can occur due to data entry mistakes, mix-ups with people who have similar names, or even identity theft.
Why It Matters
Incorrect personal information can lead to:
- Your credit history being mixed with someone else’s
- Missed payments or accounts that aren’t yours appearing on your report
- Potential issues with lenders verifying your identity
What to Do
If you notice incorrect personal information on your credit report, request a correction by contacting the credit bureaus—Experian, Equifax, and TransUnion. You should also check for any unauthorized accounts, as this could be a sign of identity theft.
2. Accounts That Don’t Belong to You
How It Happens
One of the most damaging credit report errors is when accounts that aren’t yours show up on your report. This can happen due to:
- A mixed file, where your credit history is combined with someone else’s
- Identity theft, where someone opens fraudulent accounts in your name
- Errors from lenders or creditors reporting incorrect data
Why It Matters
Having someone else’s debts on your credit report can:
- Increase your debt-to-income ratio, making it harder to get loans
- Lower your credit score due to missed payments on accounts you don’t recognize
- Create financial stress and time-consuming disputes
What to Do
If you find an unfamiliar account on your report, dispute it immediately with the credit bureaus, you can do it yourself, or hire a credit dispute attorney to do it for you. You may also want to contact the lender associated with the account and request verification. If identity theft is a concern, place a fraud alert on your credit file and consider freezing your credit to prevent further fraudulent activity.
3. Inaccurate Payment History
How It Happens
Your payment history is one of the biggest factors affecting your credit score. A single late payment can drop your score significantly. However, errors in reporting payment history are common, including:
- Payments marked as late when they were actually paid on time
- Accounts listed as delinquent even though they were settled
- Payments not being recorded at all
Why It Matters
Payment history makes up 35% of your credit score, so any inaccurate negative marks can:
- Reduce your credit score, making it harder to qualify for loans
- Cause lenders to see you as a high-risk borrower
- Increase your interest rates on credit cards and loans
What to Do
If you see an incorrect late payment, contact both the credit bureau and the lender that reported it. Provide proof, such as bank statements or payment confirmations, and request a correction.
4. Incorrect Account Balances or Credit Limits
How It Happens
Sometimes, creditors report the wrong balance or credit limit for your accounts. This can happen due to delayed updates or reporting errors.
Why It Matters
Your credit utilization ratio—how much credit you’re using compared to your total available credit—makes up 30% of your credit score. If your credit report shows an incorrect balance or limit, it can:
- Make it look like you’re using more credit than you actually are
- Hurt your credit score by increasing your utilization percentage
- Impact your ability to qualify for new credit or loans
What to Do
Check your credit report regularly for inaccurate balances. If you find an error, dispute it with the credit bureaus and contact the creditor to request a correction. Keeping your balances low and paying off debt can also help maintain a healthy credit score.
5. Outdated or Incorrectly Reported Negative Information
How It Happens
Negative items like bankruptcies, charge-offs, and collections should only stay on your credit report for a certain period:
- Late payments: 7 years
- Bankruptcies: 7–10 years
- Charge-offs: 7 years
- Collections: 7 years
Sometimes, outdated information stays on your report longer than it should, or negative items are incorrectly reported as open or unpaid when they’ve already been settled.
Why It Matters
Outdated or incorrect negative marks can:
- Keep your credit score lower than it should be
- Make lenders less likely to approve you for credit
- Cost you higher interest rates on loans and credit cards
What to Do
Check your report for old negative items that should have been removed. If you find outdated information, dispute it with the credit bureau and request its removal. If an account is incorrectly listed as unpaid, provide documentation showing that it was settled.
How to Dispute Credit Report Errors
If you find an error on your credit report, take these steps to fix it:
- Request Your Credit Report – You’re entitled to a free credit report every 12 months from each of the three major credit bureaus at AnnualCreditReport.com.
- Identify the Errors – Carefully review your report for mistakes in personal information, accounts, payment history, or balances.
- Gather Evidence – Collect any supporting documents, such as bank statements, payment confirmations, or account statements.
- File a Dispute with the Credit Bureau – Contact the credit bureau reporting the error (Experian, Equifax, or TransUnion) and submit a formal dispute online, by mail, or by phone.
- Follow Up – The credit bureau must investigate your dispute within 30 days. Check back to ensure the correction is made.
When to Contact an FCRA Lawyer
If a credit bureau or creditor refuses to correct an error, or if errors on your report have caused financial harm, you may have legal grounds to take action under the Fair Credit Reporting Act (FCRA). An experienced FCRA lawyer in Chicago can help you:
✔ Hold credit bureaus and creditors accountable for inaccurate reporting
✔ Seek compensation if errors have damaged your finances or creditworthiness
✔ Take legal action if your rights under the FCRA have been violated
Conclusion: Protect Your Financial Future
Credit report errors can have serious consequences, from loan denials to higher interest rates and lost job opportunities. By regularly reviewing your credit report and disputing inaccuracies, you can protect your financial health and ensure your credit score accurately reflects your financial behavior.
If you’re struggling with persistent credit report errors, an FCRA lawyer can help you fight back and restore your credit. Don’t let reporting mistakes hold you back—take control of your financial future today!
