Mistakes on your credit report? What to do about it.

Brace yourself: It’s estimated eight out of 10 of us have errors on our credit reports.

A widely circulated U.S. Public Interest Research Group study found a whopping 30 percent of those mistakes involved student and auto loans, credit cards and mortgages that had been paid off years ago, but were still listed as “outstanding accounts.”

These mistakes are costly, and your credit score is on the line. Don’t be unpleasantly surprised when you go to obtain a loan. Your credit report should reflect your good credit habits.

 

Ready, set, go: Review your report.

You can obtain your credit report via many companies found online – for a fee. Before you pay, know that you are, by law, entitled to one free credit report annually from each of the three major credit reporting agencies – TransUnion, EquiFax and Experian, via https://www.annualcreditreport.com/.

Look over each of the three credit reports with a fine-toothed comb.

Some of the more common mistakes (and key things to watch out for) include:

  • Mistaken identity. Whether you realize it or not, many other people in the world share your name. Their accounts and, perhaps, unsavory credit history can get mixed-up with your valid data.
  • Identity theft. Accounts you don’t recognize may be a red flag that your data has been stolen.
  • Outdated information. Your ex’s information may still be listed and, effectively, damaging your good credit. Accurate negative info, such as late payments, is also supposed to be removed after seven years – but that doesn’t always happen. Check.
  • Wrong payment info. Mistakes happen. You may have submitted a payment on time, but it’s not reflected as such on your report.
  • Delinquency errors. These are biggies. Sometimes when an account is transferred to a debt collector, more than one date will be listed for when the account went into delinquency, which could mean this black eye remains on your report for longer than it should. Importantly, while credit reporting agencies are quick to report delinquencies, often notes about those accounts being remedied or resolved are overlooked.
  • Notation mistakes. Even something as simple as an account that was closed by you not being noted as such, can reflect poorly on you and your creditworthiness. In this case, it may appear that the account was closed by the creditor and not by you.

See an error? Make a detailed list of any and all mistakes. This list may include both inaccuracies, as well as missing or incomplete data that should be on your credit report but isn’t.

File a dispute. The credit reporting agencies have made it easier than ever before to dispute information on your credit report. TransUnion, EquiFax and Experian all give you the option of filing your dispute online at their respective sites.

Submit supporting information. Anything to help your case, such as copies of correspondence that clearly marks an account as “paid” or copies of statements reflecting a zero balance, should be sent with your letter to the address listed for the appropriate credit reporting agency on its website. It’s also a good idea to include a copy of your report, offsetting any items you are disputing. File away all your original documents.

Track all correspondence related to the dispute.  In addition to keeping your letter on file, you’ll also want to track any additional communication you had tied to resolving these mistakes.

Wait (within reason). After you send your letter or submit your online dispute, you may find the mistake gets resolved quickly; suspect items may be removed within three days. If not, the agency has 30 to 45 days to complete its investigation, at which time they’ll send you the results and, hopefully, an amended (and accurate) credit report.

While it may seem like a hassle, catching mistakes early prevents a seemingly small problem from snowballing and impacting your healthy credit.

Be proactive. Do your homework. Rinse, repeat.