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By Mikey Rox / Len Penzo dot Com
August 15, 2015

Financial institutions rely on one major determining factor when deciding whether or not to give you a loan (or a loan with favorable terms, at least) — and that’s your credit report.

Credit reports contain a lot of information, including your name, address, place of employment, credit lines, balances, payment history and more. But that information isn’t always correct. In fact, research from the Federal Trade Commission reveals that 25% of consumers have credit report errors that could lead to lower scores, and 5% of those consumers could see a drop of up to 25 points while one in 250 people could see a drop of 100 points as a result of incorrect information. Which is why — since credit report errors are relatively common — you should check your credit report thoroughly from your three freebies available to you annually from the ‘Big Three’ credit bureaus: Equifax, Experian, and TransUnion.

Here are some of the stealthier errors that often fly under the radar that you can resolve by flagging and reporting them to the respective bureaus:

1. Incorrect Social Security Number

Our Social Security numbers (SSNs) are sacred information as they link us to many establishments that use the digits as identifiers. They’re important because sometimes our other identifying information may be similar to someone else’s — our names, especially — and that can become confusing if those lines somehow get crossed. An incorrect SSN can lead to a major financial headache if it isn’t caught early on.

“Transposed or incorrect numbers for a Social Security number can result in a merged report,” explains personal finance and credit expert Kristy Welsh, a contributor for CreditRepair.com. If you notice that your SSN is incorrect contact the bureau(s) that has the wrong information so they can amend and update your correct information.

2. Inaccurate Loan and Credit Card Payments

Did you know that 35% of your credit score is impacted by your payment history? According to Welsh, one late payment can affect your score dramatically. But what if you’re diligent about paying on time and your report erroneously shows a 30-day late pay? It happens.

3. Out-of-Date Charge-Offs and Closed Lines of Credit

The day you make your last payment on a loan is always a great day. I’ve successfully paid off two of my student loans and I celebrated each one. So the last thing you want to see is an open line of credit on your report that you worked very hard to close.

“It’s not unusual for a closed line of credit to continue to appear active on a credit report,” says John Heath, directing attorney and credit expert at Lexington Law. “If you’ve closed a line of credit, it should be noted as closed or canceled.”

4. Incorrect Address

If you tend to move somewhat frequently, then your current address may not be updated. When scouring your credit report, ensure that your current residence is listed as your primary dwelling.

“An incorrect address may not seem like a big deal, but they can lead to merged accounts,” Welsh warns. “A wrong address may impact you in other ways,” she says. “Because insurance companies, for instance, base their rates in part on where you live, you may (inadvertently) end up paying more for your car insurance.”

Welsh knows firsthand the ramifications of an incorrect address on her credit report, as it were.”Because the person with whom I was merged shared my past address, an erroneous tax lien appeared on my credit report. Once the mess was straightened out, I immediately removed all of my previous addresses from my credit report.”

5. Incorrect Name

This error hits close to home as my stepbrother and I share the same first and last name, and we shared the same address for a period of time. As such, our financial information — including our taxes — has gotten mixed up in the past.

Welsh provides a sample scenario for comparison.”Your name is Betty Jones, and although you’ve never gone by Elizabeth, this name appears on your credit report,” she explains. “Because of this, you may have another Elizabeth’s information on your credit report. Merged credit reports often happen with family members who share the same name (Jr. and Sr., for instance), or when a person applies for credit under several names: Robert Jones and ‘Bob’ Jones.”

The best way to avoid this situation, of course, is to change your name to Merlin Shrewsbury — for whom there are zero results on Google. Safe bet.

6. Lagging Negative Listing

Negative listings that should have been removed can also appear on your credit report erroneously.

“Generally negative marks on a credit report should cycle off after seven years; 10 years for bankruptcies; and 15 years for tax liens,” Heath explains.

If your negative listings persist beyond those timelines, make the necessary calls to have them removed.

How to Dispute Errors on Your Credit Report

Once you’ve flagged an error, contact the respective credit bureau(s) to which the error belongs. But sometimes there are intricacies involved.

Kari Luckett, financial expert and content director for CompareCards.com, explains.” If you find a mistake, contact that credit reporting company only,” she says. “All three allow you to file an online dispute. If you have supporting documentation, attach it to your disputes.”

Luckett also advises to protect yourself with documentation of the dispute throughout the process. “That way if the reporting agency fails to properly investigate and resolve an issue after multiple attempts, the consumer has enough evidence in their back pocket to sue the agency and prove their case.”

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