Credit Report Errors: Why They’re on the Rise and How to Fix Them

Is Your Credit Report Costing You Money?

Have you taken a look at your credit reports recently? If not, you might be in for a surprise. Credit reports are notorious for containing errors, and in recent years, the frequency and difficulty of correcting these errors seem to have increased drastically.

According to data from the Federal Trade Commission, consumer complaints related to credit report issues have skyrocketed in the past few years, jumping from 165,000 in 2019 to a staggering 711,802 in 2023. And this is just the tip of the iceberg, as millions of disputes are lodged annually with the major nationwide consumer credit-reporting companies, including Equifax, Experian, and TransUnion.

So, what’s causing this surge in credit report complaints? One major factor is the increase in identity theft cases, which can wreak havoc on a victim’s credit history and lead to a flood of complaints. Fortunately, access to free credit reports has also improved, with consumers now able to access their reports for free once a week, providing a more timely opportunity to catch and report any credit damage.

However, fixing errors on your credit reports is easier said than done. Credit-reporting companies often redirect consumers to the original information providers (like credit card companies or lenders) when errors are disputed, creating a frustrating back-and-forth loop. Additionally, the prevalence of credit repair companies has added another layer of complexity to the process, with many offering unnecessary services that consumers can easily handle themselves.

Despite the challenges, it’s crucial to stay vigilant and regularly monitor your credit reports to catch and address any errors before they impact your financial plans. You can obtain free copies of your credit reports from all three major reporting agencies via the federally authorized website AnnualCreditReport.com. Look out for inaccuracies like accounts you don’t recognize, hard inquiries for credit you didn’t apply for, or incorrect personal information.

If you do find errors, there are steps you can take to dispute them successfully. Gather supporting documents, determine the source of the error, and follow the proper channels to submit your dispute. While there’s no guarantee that your dispute will be resolved, taking action is essential to protect your financial reputation.

In cases where disputes are ignored or mishandled, you may consider filing a complaint with the Consumer Financial Protection Bureau or seeking legal counsel for more extensive action. Your credit health is crucial to your financial well-being, so don’t overlook the importance of maintaining accurate and up-to-date credit reports.

Stay informed, stay proactive, and stay on top of your credit reports to ensure that they accurately reflect your financial history and help you achieve your goals.