Credit report mistakes and what to do about them

If credit report information is wrong, it can take years to correct, and in the meantime, a person's ability to borrow is seriously in jeopardy. A large number of lenders rely, possibly too much, on information contained in a credit report.

Continued below

By law, the bureaus are expected to respond to a query about errors within thirty days, but in practice, it can take a great deal longer than that. A few of the more difficult examples frequently involve confusion as to identity or identity theft, or just plain, old, run of the mill typographical errors. The credit report problems that take the longest to resolve are those where the lender maintains that the erroneous information is correct, even if the consumer can prove otherwise. Although credit report mistakes regularly are minor ones, up to one quarter of reports have mistakes that are significant enough to prevent a consumer from getting credit. A prominent study indicates that nearly 80% of credit reports have errors.

What happens when credit report information isn't correct? Credit background documentation, sold to lenders in the form of a credit report, tells lenders what they need to know before they decide whether or not to lend money or offer credit to a person. By now, everyone, or nearly everyone, knows that their financial lives are contained within information assembled by the three major credit bureaus - Equifax, Experian and Trans Union.

Mistaken identity - Most of the time, credit records that show the consumer is dead are a case of wrong identity, but if there's a death certificate involved, it might take phone calls, lawyers and even lawsuits to clear up. There have been cases of consumers who could not qualify for loans because the bureaus believed they were dead. If the credit bureaus are certain you are deceased, you are in a world of hurt, as nobody will lend money to a person who is dead. Being alive might appear like an easy thing to prove; after all, a phone call from the person should prove otherwise, but that does not appear to be the case.

A lot of common errors are quickly fixed; quickly corrected problems involve incorrect home addresses, ages, telephone numbers, and the like. Fixing a few errors can take a while, due to the intricacies of the information involved.


With increased dependence on computer created financial information taking over our lives, the least the bureaus could do is help to make sure that data is accurate. Legislation to fix the problem of errors seems unlikely, though, as Congress is presently pretty happy with some of their recent financial legislation, such as the bizarrely named Bankruptcy legislation. There doesn't appear to be any Federal legislation in sight to help straighten this situation out, but it would be nice. As these matters are being straightened out, the person's credit score is harmed, and he cannot obtain a loan, or a charge card, or possibly work or a house.