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Credit bureaus can, and do make mistakes. What can you do?
.A recent study, disputed by the credit bureaus, shows that nearly four out of five credit reports contain errors. Worse, a full one fourth of all reports contain errors that are serious enough to prevent the consumer from obtaining a loan. The bureaus claim that, due to handling billions of pieces of information per year, the incidence of errors in unavoidable. That may be true, but that’s not the problem. The problem is that it can take months and even years to fix errors that should be repairable in days.
Here are some more examples of the kinds of problems that can haunt consumers:
- Paperwork errors - There have been cases of homeowners paying off their mortgages, only to see their credit reports indicate that the mortgage was closed with payment due. They’ve paid off the loan, but the credit report indicates that they have not. This one can be tough to unravel, and it can be especially harsh if the homeowner needs to buy another house. The “late payment” notification will undoubtedly hurt his or her credit score, and that, in turn, will affect the borrower’s ability to obtain affordable financing when buying the new house. The difference can be three percent or more on the interest rate.
- Automation errors - This author once had a problem when attempting to submit a check for a large payment to a credit card company. The computer that read the check read the amount as only 10% of the actual amount of the check, and that amount was less than the minimum payment due. This triggered increased interest rates and “insufficient payment” fees. Fortunately, this problem was resolved pretty easily, but often problems of this type can linger for quite some time.
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