How accurate is your credit report?

Despite their importance, it is widely estimated that as many as 70% of all consumer credit reports contain errors, and 25% of these may be so inaccurate that a consumer may be rejected for a loan or employment. It is critical for you to know and regularly review the information contained in your credit reports, ensure that the information reported is accurate, and properly dispute any information that is inaccurate or a result of identity theft or fraud.

You should carefully review your personal credit reports, from each of the credit reporting agencies (credit bureaus), no less than once per year. Reviewing your report from each bureau is important because many creditors do not report to all of the bureaus, and the information contained in the reports can vary significantly between each bureau. See Free Annual Credit Reports for more information.

How Your Credit Report Information is Displayed

Each credit reporting agency has its own unique way of organizing and displaying the information contained in their credit files when they produce a consumer’s credit report. However, the following examples are representative of the way that the information may appear in your reports.

Tip:  Every credit report generated is assigned a unique report reference number, which may also be referred to as a report confirmation number. This number will typically appear on the first page, or cover page, of your report. Any time that you receive a copy of your credit report, you should always note the report's unique report reference number because you will need to include this number on any notice of dispute regarding an item or information that appears on that specific report.

Credit Report Header Information

The credit report header appears at the beginning of your credit report, and includes the basic information that has been reported about you to the credit reporting agency. The credit report header includes such information as your Social Security number, your name and other name variations that have been reported, your current and previous employers, your current and previous addresses, etc. It may also include a summary of open credit accounts, collections accounts and derogatory information, and also certain public records such as reported bankruptcies, liens and judgments, and certain felony convictions.

It is important to review your credit report header information because incorrect information or variations of name, SSN, and other key identification information could indicate potential synthetic identity theft.

When reviewing your credit report header information, you should look for any inaccuracies and unrecognized information. You should be especially alert for:

• Unknown names or aliases
• Unknown addresses
• Unknown employers
• Unknown telephone numbers
• Other Social Security numbers which may have been linked to your credit report or variations of your SSN
• Unknown or incorrect public records such as bankruptcies, judgments, or criminal convictions

Trade Line Information

A trade line is a reported credit account and the corresponding information for that account, including but not limited to: credit grantor, type of account, loan or amount financed, payment terms, your payment history, etc.

While reviewing your credit report trade lines, you should be especially alert for any unknown accounts, and also any:

• inaccuracies and/or omissions
• account balances that vary significantly from your own records
• incorrect account status (past due, charge-off, etc.)
• unusual or unrecognized account activity dates (if reported)

Example Credit Report Trade Line Information

ABC Credit Company
123 East Main Street
Anytown, Minnesota 12345

Credit Inquiries

Credit inquiries are typically listed at the end of your credit report, after the trade line information. A credit inquiry appears on your credit report when a current or prospective credit grantor has reviewed your credit file.

A "hard inquiry" results from an actual application for credit or a credit line increase that you initiated, and a large number of hard inquiries can negatively impact your credit score.

In contrast, many companies routinely make pre-screened credit offers based upon specified criteria, and creditors with whom you have an existing account may also periodically review your credit file in consideration of an increase or decrease in your credit line, an increase or reduction in interest rates, etc. These screening and review processes may result in the appearance of "soft" inquiries on your Consumer Disclosure (personal credit report) and do not negatively impact your credit score.

Unusual or unknown credit inquiries, or a large number of inquiries in a short period of time, could be a potential indicator of actual or attempted credit identity theft. In some credit report formats, you may not always be able to easily distinguish between hard inquiries that are the result of actual applications for credit, and soft inquiries that are the result of screening and periodic review processes. However, the name and contact information for the company that made the inquiry should also be included, which you can utilize to follow-up on any unknown or unrecognized inquiries.

Tip:  Because most creditors report to the credit bureaus only once per month, and some only once per quarter, a new account that resulted from a credit inquiry may not appear on your credit report for 30 to 90 days after the initial inquiry was made and the account was opened.

Any of the preceding discrepancies or the appearance of unknown or unrecognized information in your credit report may be a potential sign of actual or attempted credit, financial, or business identity theft.