Your credit report contains a detailed record of your past use of credit, and can have a big influence on your life.
Whenever you apply for a loan, lenders will typically look at your credit report (either a hard or soft credit inquiry) to decide whether or not to lend to you, as well as how much interest to charge.
Potential employers may also check your credit. And, your credit report may be pulled when you are trying to rent a home, connect utilities, or get a cell phone.
Since credit reports are so important to so many aspects of your life, it’s essential they’re accurate.
Unfortunately, they have more errors than many people may realize. According to the Consumer Financial Protection Bureau (CFPB), one in five people have an error on at least one of their credit reports.
While a misspelled name or incorrect bank balance might not seem like much, it could be impacting your credit score, and hurting your ability to get new lines of credit, or making the terms of the credit more expensive. Ultimately, these errors could be costing you money.
That’s why it’s important to periodically check and monitor your credit reports.
This can help you ensure that the information being used to calculate your credit scores is accurate and up to date. It can also alert you to fraud or identity theft.
In addition, when you’re working on building credit, it can be helpful to see what potential creditors see when they check your credit.
Here’s how to do it, and key things to look for when reading your reports.
Getting a Credit Report
Like going in for a check-up once a year can benefit your physical health, regular credit report check-ups can benefit your financial health.
Everyone is entitled to see their credit reports for free once a year at the government-mandated AnnualCreditReport.com site.
It’s a good idea to take full advantage of this service, and to look over your reports from the three major bureaus annually.
Checking your credit report regularly can also make it easier to notice when the numbers look off or if something’s amiss.
Scanning a Credit Report
The best way to find an error in a credit report is to read through it thoroughly.
The CFPB recommends making sure that the following information is accurate:
• Social Security Number
• Current Address
• Current Phone Number
• Previous Addresses
• Employment History (names, dates, locations)
• Current Bank Accounts Open
• Bank Account Balances
• Joint Accounts
• Accounts Closed
If any of the above is incorrect, the report has an error that you may want to dispute.
Common Credit Report Errors
While there are any number of errors that could crop up on a credit report, some are more likely than others. According to the CFPB, these are among the most common:
• Typos or wrong information. In the personal information section, names could be misspelled, or addresses could just be plain wrong.
• A similar name is assigned to your report. Instead of a typo, the credit report might be pulling in accounts and information of a person with a similar name to yours.
• Wrong accounts. If an account is in your name but unfamiliar to you, this could be proof of identity theft.
• Closed accounts are still open. You may have closed a savings account or credit card recently, but the report shows it as still open.
• Being labeled “owner” instead of a user on a joint account. If you’re simply an authorized user on a joint account or credit card, your credit report should reflect that.
• False late payment. A credit report might show a late or delinquent payment when the account was paid on time.
• Duplicate debts or accounts. Listing an account twice could make it look like more debt is owed, resulting in an incorrect credit report.
• Incorrect balances. Account balances might show incorrect amounts.
• Wrong credit limits. Misreported limits on credit card accounts can impact a credit score, even if they’re only off by a few hundred dollars.
How to Report an Error
Errors on credit reports don’t typically fix themselves. Account owners often have to be the ones to bring the error to the credit bureau’s attention.
Here are steps to take if you find an error in one of your reports.
1. Confirming the error is present on other credit reports.
Credit scores may vary across credit reporting bureaus, but all the core information should be the same. That means if there’s an error on one, it’s best to check that it’s on the other two. You can order free reports from all three bureaus–Experian, Equifax, and TransUnion–from the free Annual Report Site , and check each report against the others.
2. Gathering evidence.
To prove an element of the credit report is wrong, there needs to be evidence to the contrary. That means you’ll want to collect supporting documentation that shows the report has an error, whether that’s a recent bank statement, ID, or a loan document. Having this documentation on hand can make the process move faster.
3. Reporting the error to the credit reporting company.
To resolve the error, you’ll want to file a formal dispute with the credit reporting company. That means sending a dispute via snail mail (using this template from the CFPB ) or filling out a form online at the company’s site (listed below).
It’s important to make sure to include all documentation of the error, in addition to proper identification.
Here’s how to contact each credit reporting company:
Online Dispute Form
Mail dispute form to:
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30348
Online Dispute Form
Mail dispute form to:
P.O. Box 4500
Allen, TX 75013
Online Dispute Form
Mail dispute form to:
Consumer Dispute Center
PO Box 2000
Chester, PA 19016
4. Contacting the furnisher (if applicable).
A furnisher is the company that gave the credit reporting bureau information for the report. If the report’s mistake is an error from a bank or credit card company, you can also reach out to the furnisher to amend its mistake. You can contact the company through mail (the address can be found on the credit report), or reach out to customer service by phone or online.
If the furnisher corrects the mistake, it could, in turn, update the credit report. But, to play it safe, reach out to both parties.
5. Reaching out to the FTC to report identity theft (if applicable).
If you notice an error that suggests identity theft (such as unknown accounts or unfamiliar debt), it’s a good idea to sign up with the Federal Trade Commission’s (FTC’s) IdentityTheft.gov site in addition to alerting the credit bureaus. The FTC’s tool can help users create a recovery plan and figure out the next steps.
6. Sitting tight and waiting for a response.
Once someone sends a credit dispute to a bureau or furnisher, they can expect to hear back within 30 days, typically by mail.
When a credit bureau receives a dispute, they have one of two choices: agree or disagree. If the bureau agrees, they will correct the error and send a new credit report.
If the bureau disagrees and doesn’t believe there’s an error, they won’t remove it from the report. In some cases, they may not agree there’s an error because there’s a delay in information getting to them.For example, a recently canceled credit card might not show up as canceled in their records yet. Changes like that might take some time.
However, if you’re confident of the error and a credit bureau doesn’t agree, that’s not your last stop.
You can also reach out to the CFPB to file an official complaint . The complaint should include all documentation of the dispute. Once the CFPB receives the complaint, you can keep track of its progress on the organization’s website.
Checking your credit reports can help you ensure that the information being used to calculate your credit scores is accurate and up to date. It can also tip you off to fraud or identity theft
It’s easy and free to gain access to your credit reports from the three major bureaus once a year. Taking advantage of this service (and reporting any errors you may come across) can be key to maintaining good credit, and good overall financial health.
Another way to maintain good financial health is to pay your bills on time (which can boost your credit score), and to keep track of your spending.
Signing up for SoFi Money® Cash Management Account can help with both.
SoFi Money is a mobile-first account that allows you to track your weekly spending right in the dashboard of the SoFi Money app.
You can also set up all of your bill payments directly from the SoFi app or on your computer to help ensure that payments are never missed or late.
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