It might surprise you to discover that simple errors (which may or may not be your fault) can prevent you from getting a loan. The credit bureaus (Equifax, Experian, and TransUnion) are private institutions which collect a lot of information about you from many different sources. Unfortunately, not all of that information is correct.
Data entry mistakes and accidentally merged credit files due to similar names or social security numbers are more common than you think. Then, there is always the possibility of identity theft.
Here are the 3 most common Credit Report Errors
1. Personal Information Variances. Variances in your personal information like multiple names, multiple addresses, and multiple employment info may make you look like you frequently move and change jobs and identities. Instability is a big turn off for lenders; you want your credit report to make you look as stable as possible. You want to shoot for one name, one address, and one employer on your credit report. More about Personal Info Variances.
2. Account information. You may see collection accounts, credit cards, mortgages, or inquiries which you do not recognize. These accounts could be appearing on your credit report because someone else’s report was merged with yours due to a data entry mistake by the credit bureau. This could also be a result of identity theft.
3. Payment information. Make sure that all of the accounts on your credit reports contain correct payment information as well as correct statuses and dates. Paid off accounts should report as closed, $0 balance, and a status of paid off. Make sure that the date of last activity, date opened, date reported, and date last payment made are all correct. Any mistakes within the trade-line itself may lower your overall credit score and stop you from getting the loans/ interest rate which you deserve.
According to a 2004 study by the US Public Interest Research Group, over 79% of all credit reports contained errors. Since then, Identity theft has been the fastest growing crime in America, for 8 years in a row. Mistakes happen, identity theft happens & that is why being aware of what is being reported on your credit report has become so paramount. These simple errors could prevent you from getting a mortgage, auto loan, personal loan, business loan, or even a job.
So check all 3 of your credit reports regularly, and go over all of the information being reported in these reports. Make sure that everything being reported about you is up to date and completely accurate.