How Common are Credit Report Errors?
Credit reports can affect many aspects of our lives such as buying a car or applying for a mortgage. Credit reports are used by lenders to determine our credit suitability and financial situation. Despite the importance of credit reports, credit reports are often inaccurate and contain errors.
But exactly how common are credit report errors? Let’s take a close look at the issue and some credit report error statistics.
Why Credit Report Errors are so Important
Credit reports are compiled by Equifax, Experian, and TransUnion who account for the major credit bureaus in America. These bureaus collect credit history information from different sources including banks, credit card companies, and other lenders. They then use this information to create credit reports which include the personal data, credit accounts, payment history and other financial details for consumers all over the United States.
Lenders, landlords, employers and companies access your credit report and use this information to evaluate your financial stability. This is exactly why a credit report can determine whether or not you get approved for a loan, credit card etc.
Now, let’s see what the statistics say about credit report errors…
Credit Report Error Statistics in America
According to the Federal Trade Commission (FTC), one in five people will have a credit error on their credit report. These errors can be minor mistakes such as misspelling of names or addresses but there are also more serious issues like fraudulent accounts or incorrect payment records. The FTC also found that 5% of people had credit errors which required them to pay more for loans.
It’s true; the major credit bureaus have files on over 200 million consumers and the above FTC study suggests more than 10 million consumers have credit errors on their reports. In short, credit errors affect millions of people in America and it’s important to remove these errors before they damage your credit rating.
But you might be wondering how these credit errors can happen?
Why Do Credit Report Errors Happen?
Credit errors are very common and there are many reasons why they might happen. For instance, creditors often report inaccurate information such as late or missed payments to the credit bureaus. Credit bureaus are known to mix up consumer reports and this is especially true when a consumer has a name or social security number that is similar to another consumer. Credit bureaus are also slow to update credit reports which means they fail to update records with your recent address change or recently paid loans. In sum, there are many reasons why credit errors exist and you should focus on removing these credit errors instead of wondering how they got there in the first place.
Once again, these inaccuracies can have serious consequences so it’s important to remove credit errors in order to protect your financial well-being.
How to Check for Errors on Your Credit Report
You can check your credit report for errors and it’s important to do this on a regular basis. This involves contacting the bureaus to request a copy of your report and then examining these documents closely in order to spot any mistakes or errors. Upon finding any credit errors, you can file a dispute and the credit bureau is required by law to investigate and respond to your claim within 30 days. But if you don’t have the time or will to do this yourself, a credit lawyer can spot credit errors and file a dispute with the bureau on your behalf.
How a Credit Lawyer Can Help with Credit Errors
If you need assistance or spot any errors on your credit report, hiring a consumer lawyer can help resolve the issue quickly. These attorneys specialize in credit related issues and have experience in disputing errors on credit reports. If a dispute is not resolved by the credit bureaus, an attorney can file a lawsuit against the credit bureaus on your behalf and work towards obtaining a settlement.
Credit report errors are surprisingly common and can have serious consequences for your financial well-being. While you can protect yourself by checking your credit report, hiring a credit lawyer is certainly the best way to identify and dispute errors and reach a settlement as quickly as possible.