Creepin' Credit Errors - errors in personal credit reports

Black Enterprise, Sept, 2001 by Leslie E. Royal

Here's what you can do when mistakes sneak up on you

IN MARCH 1999, EDWARD AND SYLATHIA JOHNSON WERE ELATED AS THEY WENT TO PARKWAY Mortgage Co. in Savannah, Georgia, to apply for financing of a new home. They had just settled on a charming, picturesque home in the Planter's Common subdivision on the southside of historic Savannah. The couple was bewildered when the loan officer informed them that only a few lenders were willing to underwrite the loan, and only for 80%, because of Edward's low credit rating.

"I went to meet with the loan officer as a result of that conversation. He went over the report with me, attempting to explain what we would need to do in order to bring my husband's credit ratings up," recalled Sylathia.

Edward's credit report reflected that a JC Penney credit card account, opened in 1997, was over the limit and that no one had made a single payment toward it. Likewise, a Capital One VISA account had never received a payment, since its inception in 1998, but carried a balance. Oddly, Edward's daughter's name appeared in the reference section of his credit report.

"Edward and I have been married for six and a half years and I have handled all of our bills the entire time," says Sylathia. "I told the loan officer that those were not his accounts and he suggested that I call the Merchant Credit Bureau in Savannah (used by a mortgage company to make rulings). [The bureau], in turn, referred me to the three main credit bureaus [to investigate] the discrepancies."

Sylathia sent letters to Experian (formerly TRW), Equifax, and TransUnion. Initially each agency incorrectly told her that the accounts were that of her husband. She then called JC.Penney to further contest the report. After locating the account number in the computer, JC Penney informed her that Edward's name and Social Security number did not appear on the account. Furthermore, after sending a letter to Capital One, they determined that it was not Edward's account either. In fact, both companies found that the accounts in question were that of Edward's daughter, and agreed to correct the inadvertent errors immediately.

"I knew that although my daughter's name was on the account, she did not try to use my Social Security number. There had to be a mistake," said Edward. "My daughter and I have the same last name, the same first two initials in our first names, similar Social Security numbers, and she lives at my former address with her mother. They told me that it was a human error. But that human mistake could hang my butt."

Many consumers assume that whatever appears on their credit report is accurate and precise. After all, your credit report determines whether or not you can purchase a new home or car and how low the interest rate will be. It can also determine whether or not you get that high-profile job in a sensitive career field or the best insurance rate possible. It determines whether or not you get a VISA card with a $300 credit line and a 21% interest rate or an American Express Gold with an unlimited credit line.

As with the Johnsons, it is a very bad idea to assume your credit is as it should be. There could be an unintentional mistake on the part of the credit reporting agency (CRA) or an information provider such as a credit card company. Student loan organizations or mortgage lenders may have records that reflect you still owe them, while you are certain that your bills have been paid. Your former spouse could have agreed to pay all of your joint debts in your divorce decree, but several years later you learn that one of the debts appears on your credit report. Or, worse, yet, you could be a victim of identity fraud if another person uses your Social Security number. We've polled several experts who offer tips on how you can protect yourself from credit foul-ups. Here's what they suggest:

GET A COPY OF YOUR CREDIT REPORT

All of our experts agree that, without a doubt, every consumer should order a copy of his or her credit report at least once a year. "Any consumer who is thinking of making a large purchase such as a home, car, or condominium should first get his or her credit report from all three major credit bureaus. The reason is [that each agency] may have different records and you don't know which [agency] a company will use," says Shirley Rooker, president of Call for Action, an international nonprofit network of consumer hotlines in Bethesda, Maryland.

You can call, write, or go online to order credit reports from the three major CRAs (see sidebar). These companies gather and sell data--which reveals information about your credit worthiness--to creditors, insurers, employers, and other businesses.

There is no charge for a credit report if you have been denied credit, insurance, or employment as a result of what your credit report reveals, or if you're the victim of identity theft. However, you must request your credit report within 60 days. Also, you are entitled to one free report a year if you receive welfare benefits, your report is inaccurate because of fraud, or if you are unemployed and plan to work within 60 days. Some states require credit bureaus to offer consumers a complimentary report, even if they are not denied credit. Other states charge up to $9.20 per report. When ordering a report, provide your full name, current address, previous address, spouse's name (if applicable), Social Security number, and date of birth.