80% of Credit Reports Wrong

Credit-Score Raise

We live in a new credit world. Creditors demand higher FICO® Scores and more. In building new credit after bankruptcy and/or foreclosure which include short sale and deed in lieu of foreclosure, there are two things that remain constant. First, you need to make sure all three of your credit reports reflect only accurate information. Over 80% of all credit reports contain errors, many of them serious. Many Creditors appear to ignore the Fair Credit Reporting Act. Second you need to establish new credit in a prudent manner that is for your best advantage.

  • 54% contained inaccurate personal information such as misspelled names, wrong SS #’s, inaccurate DOB’s, inaccurate information about a spouse and out of date address.
  • 30% listed “closed” accounts as “open.” For example, listing a student loan that was paid off years ago as still outstanding. Another report listed several closed or paid off credit cards, a mortgage and an auto loan all as open.
  • 22% had the same mortgage or loan listed twice. This mistake often occurs when loans are serviced or sold.
  • 8% simply didn’t list major credit, loan, mortgage or other accounts that could be used to demonstrate the creditworthiness of a consumer.

On getting all three reports corrected, I’ve found it best to avoid credit repair organization. Know the law on credit repair organizations; they may not charge an upfront fee and can only be paid once the work has been done.  You can do this yourself. Know the credit reporting agencies are not your friends. Use great caution with what you say/write to a credit reporting agency in attempting to correct your credit. Your comments/explainations do not do anything positive for your credit scores. Your comments do not makle you more creditworthy. Keep in mind that everything you say or write can and will be used against you. Think of the Miranda warning when you communicate with the credit bureaus.

 Are there instant results to getting your reports corrected? No. How long does it take? Generally speaking, with your pro-active approach, positive results should be seen in 8-10 months.

 To begin, you need to get a copy of your credit reports. There are three credit reporting agencies: TransUnion, Equifax and Experian. You can get a free copy of your credit reports once a year. The so called free credit reports – discussed earlier – are gimmicks designed to sell you needless and useless services. I counsel that you ignore them entirely.

 All the while you are correcting your credit reports you need to begin reestablishing your credit. For a great start and for everyday guidelines on building good credit refer to my comments of June 6, 2010. Be informed.  Plan ahead and act not in desperation. Desperation leads to failure. As a handy guide, I suggest you keep the FICO® Pie Chart in mind whenever you make credit decisions. There is seldom a day that goes by when we do not make a credit decision.

FICO Pie Chart

This was originally posted almost six years ago and nothing has changed, yet. I urge all who have problems with the credit reporting agencies to file a complaint with the Consumer Finance Protection Bureau, just click here for the complaint form.

The Washington Post article of September 11, 2016, tells the story of how a reporter’s life was sidetracked by bad information kept in at least one of the credit reporting agencies. How the careless errors of credit reporting agencies are ruining people’s lives, “…since 2012, according to the bureau [CFPB], there have been more than 158,000 complaints against the three agencies, 80 percent of which were about incorrect information on credit reports. The agencies’ “primary duty is to make money,” says Chi Chi Wu, a lawyer with the National Consumer Law Center . “The consumer is not their customer. The consumer is their commodity.”

As always do not hesitate to write back with comments or questions.  I read everything that comes back, even though I don’t always get a chance to respond as quickly as I would like.

Images Credit: Google Images

Financially SpeakingJames Spray CCMB, CNE, FICO Pro | CO LMO 100008715 / NMLS 257365 |October 10, 2010 / April 3, 2014 / September 11, 2016
 Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.
 

2 comments on “80% of Credit Reports Wrong

  1. […] Score of 680 [most will need to practice what I’ve previously posted as FICO  101a, 101b and 101c for several months prior to getting approval – begin improving your FICOs as soon as your Chapter […]

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  2. […] the case of judgments not discharged in bankruptcy these may show for up to 20 years. Errors can be corrected or removed from your credit […]

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