Credit Report Errors Can Cause Very Bad Credit

Credit report errors can happen to anyone regardless of their credit rating. The three major credit bureaus maintain files on nearly 90 percent of all American adults. They collect and compile data about consumer creditworthiness from banks and other creditors as well as from public record such as lawsuits, bankruptcy filings and tax liens.

How Mistakes Happen

Some mistakes happen when credit accounts change hands while other mistakes are simply human error. With over 30,000 data processors filing more than 4 billion updates to credit reports each month, this leaves room for errors. Estimates of serious errors range from 3% to 25% which on the conservative side translates into 6 million Americans facing serious errors in their credit file that could result in the denial of credit and leave them having to fix credit report errors.

Does Your Credit Report Contain Errors?

There's a one-in-four chance your credit report contains an error serious enough to cause you to be denied credit and result in you having to repair very bad credit.

  • 79% of the credit reports contained mistakes of some kind.
  • 25% of the credit reports contained errors serious enough to result in the denial of credit.
  • 30% percent of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.
  • 54% of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect.

Source: U.S. Public Interest Research Group (USPRIG)

Mistakes Do Happen: A Look at Errors in Consumer
Credit Reports

The most valuable thing we have is our good name. The most common reflection of our reputation as a trustworthy consumer is our credit report. Unfortunately, the information contained in our credit reports, which are bought and sold daily to nearly anyone who requests and pays for them, does not always tell a true story. Many times these credit report errors are giving people very bad credit. Download Report

Errors That Can Negatively Impact Your Credit Score and Leave You Having to Fix Credit

  • Late payment information on your report that is old and outdated
  • Inconsistent credit limits being reported
  • Good credit accounts and payment history omitted
  • Showing the same loan reported more than once
  • Showing different balances that are due
  • Wrong information about the last activity date in an account

 

Statistics

  • 78% of credit reports fail to report at least one revolving account in good standing
  • 96% of credit reports report inconsistent credit limits
  • 43% of credit files report a conflicting number of times that the same account has been reported 30 days late
  • 33% of files are missing a mortgage account that’s never been late
  • 66% of files are missing an installment account that’s never been late

Source: CFA – Consumer Federation of America