Your credit report may be wrong; here's what to do about it

Bev O’Shea, NerdWallet

Consumers filed complaints with the Consumer Financial Protection Bureau in record numbers in 2020, according to a report released Monday by the U.S. Public Interest Research Group, a nonprofit consumer advocacy group. Credit reporting issues were cited in 282,000, or 63%, of the complaints. The majority noted “incorrect information” on credit reports or “information belongs to someone else,” the report said.

Not only did complaints about credit report errors lead the list of consumer grievances, but the three major credit-reporting bureaus — Experian, TransUnion and Equifax — were the top three companies complained about.

ERRORS CAN ENDANGER YOUR SCORE

Accuracy matters since credit report errors can suggest identity theft or fraudulent activity on your accounts. And because credit report data provides the raw material for credit scores, errors can lower your score.

Some of the volume of complaints may be an unintended consequence of payment accommodations mandated by the 2020 coronavirus relief bill and temporary concessions offered by lenders and credit card issuers.

But credit report errors were common even before the pandemic, says Ed Mierzwinski, senior director of the advocacy group’s Federal Consumer Program and author of the report. Payment accommodations may have led more people to check their credit reports and find those errors, he says.

Mierzwinski recommends that “any consumer with any credit account” check their credit reports. People who have common names may be at particular risk of a mix-up, he says.

HOW TO GET YOUR FREE CREDIT REPORTS

You can get a free credit report from each of the three major credit bureaus by using AnnualCreditReport.com. You’ll be asked to provide personal identifying information — your name, Social Security number, birthdate and address.

You will also be asked security questions to verify your identity. Some of those can be tough. If you aren’t able to answer correctly, call 877-322-8228 to request your credit reports by mail.

You can also download and mail a request form to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

HOW TO READ YOUR CREDIT REPORTS

Your reports from the three bureaus won’t look exactly the same. Not every creditor reports to all three and the bureaus present information in different formats. But you can use a similar procedure for reading your credit reports.

First, check your identifying information. Errors such as misspellings of a former employer are unimportant, but something like an address you’ve never lived at could suggest identity theft.

Next, check account information. Each credit account you have (and some that are closed) should be listed and include:

— Creditor’s name, account number and date opened.

— Type of account (credit card, loan, etc.).

— Account status and whether you’re current on payments. Accounts that were in good standing when pandemic-related payment accommodations began must continue to be reported that way until the accommodation ends.

— Whether you are a joint account holder, primary user or authorized user.

— Credit limit and/or the original amount of a loan.

— There may be negative information, such as collections accounts or bankruptcy records. Be sure that you recognize it and that it is accurate.

HOW TO DISPUTE ERRORS

The Fair Credit Reporting Act holds both the creditor that reports to the credit bureaus and the credit bureaus responsible for making sure the information in your credit reports is accurate.

If you spot an error in one credit report, check for it in the other two. Dispute the error with each bureau that’s reporting it. You can dispute by mail, phone or online — the credit report will include information on how to file your dispute. Credit bureaus must investigate and inform you of the result.

You can also contact the business providing the incorrect information. It must inform the bureaus of the dispute and, if it finds the information was wrong or incomplete, ask the credit bureaus to delete it.

If disputing doesn’t resolve the issue, Mierzwinski recommends filing a complaint with the CFPB and asking for an investigation. That can bring additional pressure to correct misinformation, he says.

The CFPB’s acting director, Dave Uejio, has said one of his goals is “making sure that consumers who submit complaints to us get the response and the relief they deserve.”