Better Business Bureau: Check for errors in your credit reports

Randy Hutchinson
·3 min read

An error on your credit report could cause you to be denied credit or have to pay a higher rate, miss out on a job offer, or be denied insurance or a lease on an apartment.

Getting the error corrected can take 30 days or longer, so you should check your credit report on a regular basis rather than find out there’s a problem when time may be critical. You’re entitled to get a free copy of your credit report at each of the three major credit reporting companies (Equifax, TransUnion and Experian) every twelve months by visiting AnnualCreditReport.com.

Experts disagree on the incidence of errors in credit reports. In June 2021, Consumer Reports (CR) conducted a study that found that more than a third of the participants reported at least one error on their credit reports. Amy Traub, associate director at Demos, a policy and research organization, said the large number of errors is a “real sign that the credit reporting system is failing American Consumers.” She decried the fact that the three credit reporting agencies have all the power over our financial destinies.

But as soon as CR published their findings, the Consumer Data Industry Association (CDIA), the trade group for the credit reporting industry, labeled CR’s report as “completely false and misleading” and said it was hastily compiled and done so in an unempirical manner. It criticized the composition of the survey group and the study’s mention of a rise in complaints to the Consumer Financial Protection Bureau (CFPB) that failed to recognize many complaints originated from credit repair companies simply trying to clog the system.

CDIA referred to a 2012 FTC study that it says found accuracy rates of 98 percent or higher. I read the Executive Summary of the report (it’s 370 pages long) and the numbers didn’t appear to be that good. Some of the differences in these and other studies arise from whether you count any error, such as the misspelling of a street address, or just ones that can have a material impact on a consumer’s ability to conduct a transaction for which a credit report is pulled, such as an erroneous delinquency.

The CFPB cites these common errors consumers should check for:

  • Accounts belonging to another person with the same or similar name.

  • Accounts incorrectly reported as delinquent.

  • Closed accounts reported as open.

  • Same debt listed more than once.

  • Incorrect accounts resulting from identity theft.

To correct an error, you must file a complaint with each of the credit reporting agencies where it occurs since they operate independently. You should do so in writing and include all of your contact information and as much information about the disputed debt as you can. The credit reporting agency must investigate the dispute, including forwarding the information to the lender or other company that furnished it, and generally report the results to you within 30 days. You may also want to send a letter of dispute to the furnisher of the information. The CFPB has sample letters on its website.

If the investigation doesn’t resolve your dispute, you can ask the credit reporting agency to add a brief statement about your position to the file. Creditors aren’t required to consider it.

Randy Hutchinson is president & CEO Better Business Bureau of the Mid-South. This column is in partnership with Better Business Bureau of Middle Tennessee & Southern Kentucky.

This article originally appeared on Jackson Sun: Better Business Bureau: Check for errors in your credit reports