Survey Reveals that Half of Credit Reports have Mistakes

3rd Sep 2024

A recent study into the credit reporting industry in the United States has shown that almost half of all credit reports contain errors. Having the wrong credit score could adversely affect the ability to secure credit cards or loans, mean you end up paying a higher interest rate. The study surveyed over 4,300 participants, and 44% found inaccuracies in their personal or financial information. Although based in the United States, there is every reason to suspect that a large number of British consumers could be struggling with their finances due to problems on their credit report which they are not aware of.

Credit Report Errors

The errors found on people’s credit reports ranged from minor issues like incorrect addresses or misspelled names to much more serious issues such as unrecognised accounts, incorrect debt reports, and wrongly recorded late or missed payments. More than a quarter of these inaccuracies were severe enough to impact participants' ability to obtain credit. Finding other people’s borrowing listed on your credit report could also be an indication of criminality such as identity fraud, where someone uses your personal details to take out loan agreements or buy goods on credit using your name.

Why Check Your Credit Report

Experts both in the United States and closer to home have emphasised the importance of accurate credit reports. They say that errors can lead to higher costs for car insurance, loans, and even affect rental and employment opportunities. Spotting a pattern of unrecognised accounts which could mean identity theft allows you to request flags be put on your account before the problem becomes too large to deal with. It can take some time to rectify mistakes on your file. The sooner you start to deal with putting things right, the sooner your credit score will recover and you can start applying for new credit agreements or a mortgage. Check your credit report by asking one of the major credit reference bureaux to supply a copy of your file. They may make a small charge for doing this. Then check through carefully to look for any obvious mistakes, or accounts or credit debts which you don’t recognise.

Putting the Mistakes Right

If you find an error on your credit report, you can’t expect the credit referencing agencies just to make changes based on what you tell them. Experts advise gathering evidence such as account statements and payment records, which you can use to demonstrate that an account or debt has been settled, or doesn’t belong to you. If the error is something more straightforward such as a misspelling of your name, then they may want to see official documentation such as a passport or driving licence. Although the three major credit referencing agencies in the UK (Equifax, Experian and TransUnion) do share information between them, it is generally advised to contact each separately to ask for corrections to be made. After you have had any errors corrected, monitor your score regularly so you can spot any sudden changes which might indicate a further issue.