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Common Causes for Credit Report Errors

Credit Reporting Agencies such as Trans Union, Experian and Equifax frequently make mistakes on consumers’ credit reports. About 70% of consumer credit reports contain some mistake. Chances are excellent that your credit report contains an error. Approximately 20% of these mistakes result in the denial of credit or a higher rate of interest. Some of the more common mistakes made by the credit reporting agencies include:

Identity theft. This type of error is growing exponentially and may be the number one cause for credit reporting mistakes today.
Mismerged information. This kind of error occurs between different people with the same name. For example, John A. Doe who lives in Montana may have his credit information placed on John A. Doe who lives in Florida. This is a very common mistake.
Discrepancies amongst credit reporting agencies for the same debt. One credit reporting agency may report a debt as current while another might report it as delinquent.
Delinquencies that are reported longer than 7 years. Derogatory credit information has to be removed from your credit report after seven years from the first delinquency. Sometimes a debt buyer or a collection agency “re-date” a date of last delinquency so that a derogatory stays on your credit report longer than seven years. In 2004, the Federal Trade Commission hit NCO Financial Systems with a $1.5 million fine for doing this very thing. A delinquent debt may not be reported longer than 7 years on your credit report. Yet, in order to force you to pay the debt at some point, some collection agencies “re-date” the beginning date of the debt so that it stays on your credit report longer.