Credit reports feel infallible — it’s easy to see why, considering they dictate your ability to rent an apartment, borrow a loan, and get a mortgage. But credit bureaus are run by people, too. Lenders are also people under all the paperwork.
And people make mistakes.
Notice anything off about your credit report? Review your financial records to be sure. But you’re not crazy — it’s actually quite common and current. Recently, Equifax was revealed to have made numerous errors that resulted in incorrect credit scores for hundreds, if not thousands, of Americans.
Equifax reports that errors stem from similar names, identity theft, similar addresses, and more. Plus, lenders might make mistakes when they report information to the credit bureaus.
Today, we’ll walk you through common errors to look out for on your credit report and how to fix them.
Common Mistakes on Credit Reports
Keep your eye out for any credit report entries that feel off in these areas:
- Incorrect personal information: Credit bureaus display your date of birth, social insurance number, full name, and mailing address on your report. It’s possible you moved locations and didn’t inform the credit bureau of your new address. Similarly, a new last name could be explained by a recent marriage. Personal details are extremely important and discrepancies risk being attributed to someone else’s credit debt.
- Unfamiliar credit accounts: Notice a credit card you never signed up for? This is a huge red flag. If someone else opened a credit account under your name, that’s a sure sign of identity theft. Similarly, it’s also possible that someone with a similar name to yours (family or others) opened the account, and the credit bureau mixed the files. Finally, look out for any duplicated accounts.
- Payment history errors: Are you a stickler for making payments on time? A late payment might catch your attention. You wouldn’t be the only one, as the lenders and credit bureaus sometimes record incorrect payment dates. To be safe, we always recommend paying your debt payments a couple of days early.
- Incorrect account status: Are you an authorized user on your mother’s credit card? If so, your credit report shouldn’t list you as the owner. Look for any open accounts that should be closed and vice versa.
- Negative information after six years: Negative information stays on your report for six years in most cases. If you notice any negative information after six years, those are grounds to dispute the entry.
- Balance errors: Sometimes, credit bureaus report incorrect credit balances and limits.
Take a deep breath. We understand how stressful it is to deal with debt. Low credit scores add another layer of stress, especially if you know the information isn’t true! The good news is that you can dispute errors on your credit score.
How to Make Corrections to Your Credit Report
1. Gather evidence
Notice an incorrect late payment? Print out a credit card statement proving it. See any credit accounts you don’t own? Take an inventory of all your loans, credit cards, and lines of credit. Before you contact anyone, gather as much evidence as possible to support your claim of an error on your credit report. Some documents you might compile include:
- Credit card statements and other loan statements
- Bank statements
- Government-issued ID to prove address (driver’s license)
- Government-issued ID to prove full name (health card, passport, etc.)
- Bankruptcy discharge or other similar documents
- Correspondence with lenders.
2. Contact creditors
Lenders might report incorrect information to credit bureaus. Consider writing an email — or even better — booking an in-person meeting to discuss the errors you noticed. Bring supporting documentation with you, and ask the creditors to inform the bureaus of their mistakes.
3. Contact the credit bureaus
Equifax and TransUnion, Canada’s two main credit bureaus, have forms for credit report disputes. Fill them out and await further instructions. You might complete them electronically or submit them physically by mail.
You’ll need to include all the evidence you gathered in step #1, as well as any resulting communications and documents from your conversation with the lender in question. In addition, Equifax recommends you include your unique credit report number as well.
The credit bureau will take a couple of weeks to review your claim.
4. Escalate if you don’t hear anything satisfactory
Credit bureaus report longer times than usual for dispute resolutions. Similarly, lenders might take a while to resolve your disputes.
However, you still don’t want to run around with an incorrect credit score or report. If the investigation result feels unfair, or you don’t hear anything back, you can file a complaint with your financial institution.
5. Add a consumer statement to your credit report
Hopefully, steps #1-4 will help you resolve your credit report issues.
If you feel the investigation left out important details, you can share a bit of your story on your credit report for potential lenders.
Get Debt Help from a Certified Credit Counsellor!
Your credit report is a powerful document that affects significant life choices. Debt issues can decrease your score, but so can credit report errors. Make sure to check your credit score at least once a year to look for mistakes.
Need support with debt payments? We offer free credit counselling to help clients access debt consolidation, bankruptcy, and financial management services. Contact us for a free consultation today!