Credit Report

I'm currently in the process of being approved for a home loan. Super exciting! But, upon applying I found multiple errors with my credit report. I have a really awesome credit score that I'm proud of, but there were collections, bills, employers, addresses and former names that did not belong to me. After I checked ALL my credit cards and one car loan five times trying to match up the account number, and collected myself from panic mode, I called the bank. They sent over the report they obtained and told me to dispute the claims that aren't mine.

So, I filled out the online dispute form with Equifax, one of the three national credit bureaus. I was doing a live chat with one of the customer service reps, because I had a question about the process and I didn't want to do this wrong. I literally got this as an answer, "I don't know. I don't have access to the website here." To which I replied, "OK." I waited a few moments, thinking there'd be a follow-up of "Do you mind waiting while I check on that for you?" But instead he said, "Is there anything else I can help you with?" I am still in shock. But, I figured it out on my own and they are still in the process of disputing them. It can take up to 45 days, so that's a bummer.

Lesson learned: Check your credit score annually for misinformation! It's free to request a report from each of the three national credit bureaus once a year.

So all of this got me wondering if the girl listed as my former name has my SSN and is using my identity at the hospital, cell phone store and applying for an apartment. Am I victim of identity theft? When I had spoken with a lady at the bank, she mentioned that her husband has a similar name to someone else, so they often have to dispute claims because they get put on his credit report. She made it sound common. I wasn't being asked to pay any of the collections or unpaid bills listed. I was recently approved for a credit card with what I would consider to be a high credit limit. (When I first applied online for a home loan pre-approval I applied for a credit card by mistake. I was approved for $5,000. Not quite enough to purchase a house with though! ;) ) I didn't have any unexplained purchases on my existing credit cards either. So I ruled out identity theft.

How the heck does this happen? I searched online and found some alarming statistics, and very insightful information:

• 46%-70% of credit reports contain mistakes
• 40% of credit reports contain public record information belonging to someone else, credit accounts that do not belong to the consumer or accounts incorrectly marked as delinquent
• 26% of credit errors are serious enough to deny an application for credit, housing or employment (fn1)

Mixed or Mismerged Credit File/Mistaken Identity

A mixed file is a credit reporting error that occurs when a credit reporting agency puts the information belonging to one consumer on another consumer's consumer report. This happens most often when the two consumers have similar names or addresses, but not always. Through our cases and work, our firm has learned that the credit reporting agency has known about this problem for years and can prevent it from happening but often does not.

Inaccurate or Stale Collection Accounts

Debt collection accounts also account for a high percentage of credit report errors. Often the debt collector does not get sufficient information from the creditor to identify the correct consumer or get an accurate account status. As a result, collection accounts end up on the wrong consumer's file or on the correct consumer's file with wrong information. In addition, many of these accounts get "re-aged" by the debt collector, meaning that they appear to be recent delinquencies and end up on the consumer's credit report longer than the law allows. Even if accurate, most adverse credit information can only stay on a credit report for 7 years, 10 years in some instances.


Source: http://www.creditreportproblems.com/common_credit_report_errors.htm

So it seems that there's nothing we can do to prevent these errors, other than to check regularly and dispute them.

I'm always cautious at the store--I don't hold my credit card out of my wallet while waiting. (People can take photos of it with their phones.) I use an actual credit card, not my debit card, to make online purchases. (I learned this one from a friend, who had some purchases she didn't make on her statement. The police told her to be sure she uses actual credit cards because a lot of them have policies where they won't make you pay for purchases made by a thief, and there's not a direct link to your bank account with credit cards). The above link also has some other identity fraud prevention practices if you're interested. Be safe, everyone!