Your credit report tells the world a lot about you. What if it's saying something it shouldn't? Can you dispute a free credit report?
The short answer is "yes." But before you raise that red flag, you should know about the types of errors that typically occur, and which ones are more harmful than others.
As more Americans learn how to pull their credit histories, many are finding their reports aren't giving a clear picture to potential creditors. Names are sometimes misspelled, and addresses are outdated. Even more discomforting, some people find information they don't recognize.
Some of these inaccuracies are harmless, but others could hurt your chances at getting a loan. This is why experts urge people to keep track of their credit histories and to watch for anything that looks out of whack.
Here are six common errors that turn up on credit reports, and what you can do if you find one.
6 errors to dispute on your credit report
- Wrong information
- Phantom foreclosures
- Account closed by issuer
- Incorrect account balances
- Strange companies on credit history
- Old accounts
1. Wrong information
What if your credit report includes accounts that aren't yours? Or it says you lived somewhere you didn't? Or maybe it puts a different middle initial in your name?
Does this mean someone stole your identity? Not necessarily.
In many cases, the credit reporting agency has included data from another person with a similar name, says Bill Bartmann, co-founder of CFS II, a Tulsa, Okla., debt-collection company.
"In my case, I have had another Bill Bartmann's information appended erroneously to my report," he says. "It's not malicious. It's human error."
Credit reports also sometimes include out-of-date details, such as an old address or employer, says Linda Sherry, spokeswoman for Consumer Action.
Some of those details are relatively benign, but "I would dispute anything that's inaccurate," Sherry says.
The quickest way to clear your report of errors is to first communicate with the agency that reported the error. Then follow up in writing, Bartmann says.
It also makes sense to notify other credit bureaus because they often share information.
2. Phantom foreclosures
The credit reporting industry hasn't caught up to the new ways banks allow people to deal with overbearing mortgages, Bartmann says.
It still lumps together short sales, strategic defaults and loan modifications as "foreclosures" on credit reports.
That's a problem. A foreclosure is one of the most damaging items to have on your report. You may not have walked away from your home loan, yet your credit report is saying you did.
Anyone who has had a loan modification switched to a "foreclosure" can fix the problem by working with the bank that made the loan. Bartmann says the consumer should ask the bank to corroborate that it wasn't a foreclosure and help explain that to the credit reporting agency.
"It's hard," he says. "Getting them to answer the phone call, dig up old records and prove something is not easy. It does require some skill and persuasion."
3. Account closed by issuer
You may have canceled one of your credit cards, but your report says the opposite: "closed by grantor."
"When this one shows up, the score drops like a rock," Bartmann says. Your free credit score is especially sensitive to who initiated the breakup.