What kind of errors can be found on a credit report?

According to a number of consumer groups in the United States of America one other free credit report has some kind of an error on it. This means that one of the three credit reports is inaccurate and has the potential of affecting the credit rating of a person negatively due to no fault of his own. The Consumer Federation of America (CFA) And the National Credit Reporting Association once released a study that reveals that millions of Americans were in jeopardy of being denied credit or paying a high rate of interest on loans because their credit rating was suffering due to mistakes on their credit files. This research was based upon an analysis of 500,000 consumers nationwide.

The point of the statement is that it is quite likely that your credit report may contain some sort of an error as well which may be affecting your credit rating. The reason why should you should be aware of this is because you have a right under federal law called Fair Credit Reporting Act to dispute any inaccurate information on your credit report and have it updated or removed. All you have to do is file a dispute with the credit bureau either online or through postal mail by sending them a dispute letter along with documentation that proves your claim.

The reasons why inaccuracies can appear on your credit report are as follows:

Errors of Omission and Commission

These are errors that have been made by either the creditor in reporting the data to the creditor or mistakes have been made during transcription at the credit bureaus.

Accounts Missing from The Credit Report

It is estimated at one point of time that 78% of all credit reports were missing at least one account that was in good standing and had the potential of affecting the credit score favorably.

Missing Mortgage Accounts from the Credit Report

It is estimated by the same reports that about 33% of all credit reports were missing a mortgage accounts that had never been late.

Conflicting information between Experian, Equifax and TransUnion

It is estimated that almost 43% of the credit information had conflicting information between the three credit bureaus concerning how many times a consumer was late by 30 days on a particular account.

Mistakes on credit report can happen in many ways. They are mostly the result of human error where somebody either reported the information wrongly, spelt your name wrong or reported a wrong social security number. The result could be that your information is either not reported to the correct credit file or does not contain the correct information.

The mistakes are not all result of actions taken by creditors and the credit bureaus. Many people make mistakes them during the time of making an application for credit. In fact this is quite common. People provide the wrong social security by mistake; use a different name on different applications etc.

The point is that inaccuracies find their way on your credit report you should review your credit report at least once a year from each of the three credit bureaus and make sure that it is devoid of all errors. A slight difference in the credit score of a person can result in thousands of dollars being paid extra on a higher interest rate.