Common Consumer Report Errors

Consumer Report Errors are Rampant

As many consumers know all too well, credit reports are often full of damaging errors. Studies show that inaccurate consumer reports are a big problem:

• 46%-70% of credit reports contain mistakes
• 40% of credit reports contain public record information belonging to someone else, credit accounts that do not belong to the consumer or accounts incorrectly marked as delinquent
• 26% of credit errors are serious enough to deny an application for credit, housing or employment (fn1)

Some errors are more common than others, and consumers should be on the lookout for them when reviewing their credit reports.

Mixed or Mismerged Credit File/Mistaken Identity

A mixed file is a credit reporting error that occurs when a credit reporting agency puts the information belonging to one consumer on another consumer's consumer report. This happens most often when the two consumers have similar names or addresses, but not always. Through our cases and work, our firm has learned that the credit reporting agency has known about this problem for years and can prevent it from happening but often does not.

Public Record Error

Public records are judgments, lawsuits, tax liens and bankruptcies. They are reported on credit reports. They can be very damaging to a consumer's credit rating and score. This is mostly due to the fact that the credit reporting agencies obtain this data from separate companies who are sloppy in their record gathering, do not check actual court records, and don't take the time to figure out who the records actually belong to.

Inaccurate or Stale Collection Accounts

Debt collection accounts also account for a high percentage of credit report errors. Often the debt collector does not get sufficient information from the creditor to identify the correct consumer or get an accurate account status. As a result, collection accounts end up on the wrong consumer's file or on the correct consumer's file with wrong information. In addition, many of these accounts get "re-aged" by the debt collector, meaning that they appear to be recent delinquencies and end up on the consumer's credit report longer than the law allows. Even if accurate, most adverse credit information can only stay on a credit report for 7 years, 10 years in some instances.

Identity Theft

Accounts fraudulently opened or used by an identity thief are another type of recurring credit error. Victims have the right to have these accounts removed from their credit reports. Unfortunately, even after a consumer disputes fraudulent account information, it often remains on his or her credit reports because the credit reporting agencies and banks don't take the steps to check their records and properly investigate the consumer's dispute.

Inaccurate Employment Reports

Consumers lose jobs all too often because of inaccurate reports pulled by their employers. You can learn more about inaccurate employment reports by clicking here.

Fn1–Source: MassPIRG

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