Your credit report is one of the most important financial documents you’ll ever review. According to recent studies, nearly half of Americans find errors on their credit reports. These mistakes can cost you thousands of dollars in higher interest rates or even prevent you from getting approved for loans, mortgages, or rental applications.
Regularly checking your credit report for errors isn’t just smart—it’s essential for protecting your financial future. But what exactly should you look for? Let’s break down the most common types of credit report errors and how to spot them.
1. Identity Errors and Personal Information Mistakes
The first area to examine is your personal information. Even small errors here can lead to major problems, including mixed credit files where someone else’s information appears on your report.
What to check:
- Misspelled names or incorrect middle initials
- Wrong addresses (current or previous)
- Incorrect phone numbers
- Wrong Social Security number or birthdate
- Accounts belonging to someone with a similar name (mixed files)
- Being mistakenly reported as deceased
These errors might seem minor, but they can indicate identity theft or lead to your credit information being mixed with another person’s file.
2. Incorrect Account Status Information
Account status errors are among the most damaging mistakes on credit reports. These errors directly impact your credit score and can prevent you from qualifying for credit.
Common account status errors include:
- Closed accounts reported as still open
- Open accounts incorrectly listed as closed
- Accounts reporting you as the primary account holder when you’re only an authorized user
- On-time payments incorrectly marked as late or delinquent
- Incorrect dates (last payment date, account opening date, or first delinquency date)
- Accounts you paid off still showing a balance
- Discharged bankruptcy debts still appearing as owed
These mistakes can significantly lower your credit score, as payment history accounts for 35% of your FICO score.
3. Duplicate Accounts
Duplicate accounts occur when the same debt appears multiple times on your credit report. This commonly happens when:
- An account is sold to a debt collector but still shows under the original creditor
- The same debt is listed with different names (original creditor, collections agency, etc.)
- An account was transferred but appears as two separate accounts
Duplicate accounts artificially inflate your debt-to-income ratio and can make you appear to have more debt than you actually do. Each duplicate can also count as a separate negative mark against your credit score.
4. Incorrect Balance or Credit Limit Information
Data management errors involving balances and credit limits can seriously harm your credit utilization ratio, which makes up 30% of your credit score.
Look for:
- Account balances that don’t match your records
- Credit limits reported as lower than they actually are
- Credit limits reported as higher than they actually are
- Zero balances on accounts that still have debt
Your credit utilization (the amount of credit you’re using compared to your available credit) should ideally stay below 30%. If your credit limit is incorrectly reported as lower than it is, your utilization appears higher, negatively affecting your score.
5. Outdated Negative Information
Credit bureaus are required to remove most negative information after a certain period:
- Late payments: 7 years from the date of delinquency
- Collection accounts: 7 years from the original delinquency date
- Chapter 7 bankruptcy: 10 years
- Chapter 13 bankruptcy: 7 years
- Foreclosures: 7 years
- Tax liens: 7 years from the date paid
If you find negative items that are older than these timeframes, they should be removed from your credit report. This is often called “re-aging” when creditors or collection agencies illegally report old debts with newer dates.
6. Fraudulent Accounts from Identity Theft
Perhaps the most serious credit report error is an account you don’t recognize at all. This could indicate identity theft, where someone has opened credit accounts in your name.
Red flags for identity theft:
- Credit cards or loans you never applied for
- Addresses you’ve never lived at
- Hard inquiries from lenders you didn’t contact
- Collection accounts for debts that aren’t yours
If you suspect identity theft, act immediately by filing a report with the Federal Trade Commission and placing a fraud alert on your credit reports.
How to Dispute Credit Report Errors
If you find errors on your credit report, you have the right to dispute them under the Fair Credit Reporting Act (FCRA). Here’s how:
- Gather documentation: Collect proof that supports your dispute (bank statements, payment records, correspondence, etc.)
- Contact the credit bureau: File a dispute with each credit reporting agency (Equifax, Experian, and TransUnion) that shows the error
- Contact the creditor: Notify the company that provided the incorrect information (the data furnisher)
- Wait for investigation: The credit bureau has 30 days to investigate your dispute
- Review the results: The bureau must provide you with the results in writing
You can file disputes online, by mail, or by phone. We recommend using certified mail to create a paper trail.
Protect Your Credit by Reviewing Reports Regularly
The best defense against credit report errors is regular monitoring. You’re entitled to one free credit report from each bureau every 12 months through AnnualCreditReport.com.
Consider reviewing your reports at least once a year, or more frequently if:
- You’re planning to apply for a mortgage or major loan
- You’ve been a victim of identity theft
- You’re actively working to improve your credit
- You’ve recently paid off debts
Credit report errors are surprisingly common, but they don’t have to damage your financial future. By knowing what to look for and taking action when you find mistakes, you can protect your credit score and ensure you’re not penalized for errors that aren’t your fault.
Need help disputing credit report errors? At Innovating Credit Repair, we specialize in identifying and disputing inaccurate information on credit reports. Contact us today for a free credit report analysis.