If you haven’t requested a copy of your credit report, there are plenty of reasons to start. Studies show that a significant percentage of consumer credit reports contain errors—and about one in four reports includes mistakes serious enough to potentially result in a denial of credit.
Common Credit Report Errors
Errors can take many forms, including:
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Misspelled names
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Incorrect Social Security numbers
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Wrong birth dates
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Inaccurate information about a spouse
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Outdated addresses
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Accounts listed as “open” when they are actually closed
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The same loan or mortgage listed more than once
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Missing accounts that could help demonstrate your creditworthiness
How Do These Errors Happen?
Most errors originate from creditors reporting inaccurate or incomplete information to credit bureaus. Mistakes can also occur when accounts are transferred between lenders. In some cases, simple human error is to blame.
More concerning, some inaccuracies may be the result of identity theft—when someone uses your personal information to open fraudulent accounts in your name.
Why It Matters
Your credit report plays a major role in your financial life. Lenders use it to determine not only whether to approve you for credit, but also what interest rate you’ll pay. The stronger your credit profile, the better your rate.
Errors on your report could cost you money by increasing your loan rates. They may also impact your insurance premiums, as some insurers use credit history to assess risk. Additionally, certain employers review credit reports as part of the hiring process (with your permission), meaning inaccuracies could even affect job opportunities.
How Much Does It Cost?
Under the Fair Credit Reporting Act, you’re entitled to one free credit report every 12 months from each of the three major credit bureaus—Experian, Equifax, and TransUnion.
You can request your free reports at:
www.annualcreditreport.com
Using a free app like Credit Karma can help members by giving them free, consistent visibility into their credit health. With real-time alerts, easy-to-understand insights, and tools to catch errors early, it helps users stay proactive instead of reactive when it comes to their credit.