How to fix surprise credit report errors
To Her Credit
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Steward Radio and other programs. See her website SallyHerigstad.com
for more personal finance tips and free budgeting worksheets.
Ask Sally a question
, or read her previous answers in the To Her Credit archive
Dear To Her Credit,
In the process of getting our credit reports for a mortgage
loan, four negative items appeared on the reports. We applied through three
lenders to get the best rate, and found that these four items alternately
appeared on my credit report or my husband's. They date back to 2005 and 2006
(long before we met), and neither of us have any recollection of what these
items are for.
These items showed up recently: When we pulled our credit
in the past year or two, we didn't see them. We would have thought they'd have
been there at some point in the past five to six years.
What is best method of handling something like this? -- Jessica
Mystery debts can pop up on a person's credit history
anytime and cause all kinds of trouble. Although most negative items are reported
closer to the date of a missed payment, creditors can report negative items
anytime within the time period -- generally seven years -- that the item is
allowed to stay on your report.
Chances are these negative marks are from one of three
- Identity theft. This would be my first concern when
something showed up on my credit history that I was not aware of. Someone could
be taking out credit in my name without my knowledge. ID theft is the top
reason why mystery debts should always be resolved as soon as you find out
- Long-forgotten debt. It's easy to forget a debt,
especially when the name on the debt may not be the company name you thought
you were dealing with. It's interesting, though, that apparently this company
has made no effort in recent years to collect from you. Unless you are very
hard to find, that doesn't quite add up.
- Clerical error. Creditors report millions of items about
people who owe money to them. If they make mistakes a small percentage of the
time, that's enough to cause headaches for a lot of people. Errors on credit reports are very common, and I'd be willing to bet that's the culprit in your
Your negative items are especially baffling because they
managed to get on both of your credit histories at a time when you were not together.
That's not impossible, however, because the two of you were together when the
report was sent to the credit bureau. It wouldn't take many slippery fingers on
the keyboard for this debt to land on both of your reports. It only reinforces
my suspicions that the whole thing is a mistake.
Just because these negative marks are probably wrong doesn't
mean you can ignore them -- especially when you're trying to buy a house. It
can take time to straighten out errors like this, and in the meantime you could
lose the deal you wanted or end up paying a higher interest rate on your
It's important you dispute these items as quickly as
possible. Contact the credit bureaus in writing and tell them what information
you believe is inaccurate. You should also contact the creditors in writing and
tell them you dispute the items.
Once you have these marks off your report, your real estate
broker may recommend you get a rapid rescoring to get your credit report
updated within just a few days. Rapid rescoring is not free, but it may be
worth it if it rescues your mortgage so you can get into your new home as
planned. Your broker can set up rapid rescoring for you.
One thing you should not
do is pay old debts that you don't think are yours. First, it's not right.
Second, you need your money for buying your home and getting settled in it, and
to keep an emergency fund in place at all times. And third, paying even a small
amount on a debt can restart the statute of limitations on the debt and make it
appear you agreed you owe the amount.
Good luck on buying your new home, and take care of your
See related: 8 legitimate ways to improve your credit score now
Meet CreditCards.com's reader Q&A experts
Vexed by a personal finance problem? CreditCards.com's Q&A experts answer questions from readers every weekday. Ask a question, or click on any expert to see their previous answers.
Published: June 15, 2012
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
Three most recent To Her Credit stories:
- Husband's secret debt destroying marriage – He opened new cards without his wife's knowledge, racked up debt and now can't afford the minimum payments. Should she leave him or give him another chance? ...
- Resolve medical debt before marriage – A young couple wants to tie the knot, but his unpaid medical debt looms over them. Should they go ahead with their wedding plans or put them off until the debt is cleared? ...
- Is family responsible for mom's debt? – An 89-year-old mom is carrying $20,000 in card debt from purchasing gifts for loved ones. Will the family be liable for the debt when she dies? ...
Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!