Credit reporting errors have become a common issue that many consumers have faced in recent years. The Customer Financial Protection Bureau (CFPB) is required by law to publish an annual report of credit and consumer reporting complaints that analyzes consumer complaints received by the bureau. In recent years, the number of complaints reported by the bureau against Credit reporting agencies, Experian, TransUnion, and Equifax has surged drastically. For instance, the CFPB received more than 319,000 credit reporting complaints in 2020. However, in the year 2021, that number quickly surpassed that of 2020 with more than 500,000 complaints received between the month of January and September alone. More consumers now claim to have issues with credit reporting in comparison to debt collection errors. There are twice as many complaints against credit agencies than debt collectors.
The most common credit reporting errors that consumers complain about are:
Incorrect Personal Information
Inaccurate personal identifying information is one of the most common errors. As credit agencies deal with a huge amount of consumer data, the personal information of people with similar names can merge. It can be a wrong name, address, or social security number. You need to regularly check your reports for such errors otherwise it can be detrimental to your credit history.
Incorrect Account Information
There is inaccurate information pertaining to another person on the credit report of the consumer. This can be the result of a mixed/merged file when two consumers’ files are combined and their information is merged. Wrong information on your report can also arise from identity theft or error by the creditor when he sends wrong information to the agencies. An "open" entry on a closed account, inaccurate credit limits, late payments, and unpaid amounts are a few examples of inaccurate account information.
Inaccurate Account Status:
When you have paid off a certain debt but the report displays the account as ‘unpaid’.
Fraudulent accounts or identity theft:
When someone has stolen your identity and uses it to open accounts in your name. This is a commonly reported error by consumers and is the most serious one. If you notice some suspicious activity on your report, you must take action immediately.
If you are dealing with this issue, getting the error removed immediately is crucial as your credit report has a great impact on your financial well-being, and ensuring its accuracy will guarantee that you get the best possible interest rates and credit offers. Many consumers are unaware of their legal right to have inaccurate information corrected. In certain circumstances, the law entitles victims of inaccurate data on their credit report to compensation.
It is recommended that you contact an expert attorney who can guide you about your rights and help you repair your record, and obtain the compensation that you are entitled to for the damages you sustained.
