Credit Crisis Averted! How Several People Uncovered (and Fixed) Credit Report Mistakes

Credit Crisis Averted! How Several People Uncovered (and Fixed) Credit Report Mistakes

Convinced your credit is in pristine shape?

Even if your score is in the stratosphere and you'd never dream of missing a bill payment, you may want to double-check your credit report—stat!

According to a 2012 Federal Trade Commission report, some 20% of Americans have damaging marks on their credit reports that don't belong to them.

In fact, a 2015 Bankrate survey found that a whopping 35% of people have never scanned their credit reports for mistakes or signs of identity theft.

Even worse? They often slip under the radar.

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Yet these errors can have lasting effects, like lowering your FICO® score and preventing you from nabbing a favorable interest rate when buying a home.

But the good news is that these issues can be easily resolved—if you take action.

To prove it, we found two people whose credit report inaccuracies were holding their financial reputations hostage. Find out how they uncovered—and successfully fixed—those embarrassing errors.

Hint: It's not as complicated as you might think!

Just months after clearing up the mistakes on her credit report, Nicole spotted—and bought—her dream home.

“A Complete Stranger Muddied My Credit Report!”

Nicole Johnson, 37, a consulting manager in Kansas City, Kansas

"In the spring of 2003, I was a financially fit 26 year old. I had a stable job earning roughly $40,000 a year, plus several thousand dollars in my emergency fund.

It was around that time that I’d starting thinking about making the leap from renter to homeowner. So I set up an appointment with a mortgage lender to get the ball rolling, taking with me the myriad paperwork that goes hand-in-hand with buying a home.

I was expecting to be approved, but when the loan officer printed out my credit report, we were both surprised to see so many pages. It should have reflected only my modest student loan debt, a car loan, and a handful of open credit card accounts.

Boy, was I wrong.

RELATED: Ask a CFP: ‘Should You Ever Close a Credit Card?’

A quick glance at the stack revealed a major problem: There were two sets of student loans, two addresses for overlapping time periods, two Social Security numbers and, worst of all, several accounts that had negative activity.

It was painfully clear that another—less financially responsible—woman by the same name had somehow been linked to my credit report.

"Considering my common name, it’s not so shocking that this happened—but what is baffling are all the overlapping details I share with the other Nicole Johnson."

The loan officer essentially told me that she couldn't make sense of such a wonky report. It was up to me to contact each credit bureau to clear up the mess.

While taking it all in, I didn't even look at my credit score or tally up the other woman's debts—all I cared about was getting it straightened out as soon as possible.

Considering my common name, it’s not so shocking that this happened—but what is baffling are all the overlapping details I share with the other Nicole Johnson.

By looking at the year she took out her student loan, I guessed we were about the same age. We also had the same middle initial. Even stranger, a closer look at my credit report revealed that we had lived in the same complex after college! Aside from our specific apartment numbers, our addresses were identical.

In light of this information, it was no wonder our credit histories were lumped together.

I was worried about how long it would take to clear it all up—but was pleasantly surprised to find it was actually pretty simple. I mailed letters to each credit bureau, explaining the mix-up and disputing all the activity that wasn’t mine.

Incredibly, after 60 days it was resolved—and my home-buying dreams were back in reach. My score had jumped to the high 700s, which helped me qualify for a mortgage and move into my new house that very summer.

Obviously, this whole ordeal drove home the point of how important it is to monitor your credit—which I do a minimum of once a year to ensure there’s no funny business on my report.

The truth is that this kind of thing could happen to anyone—even me again. Only next time I won't be blindsided.”

RELATED: How My Credit Score Almost Cost Me My Dream House

Kenny Thompson“Being an Authorized User on My Mom’s Credit Card Came Back to Bite Me!”

Kenneth Thompson, 27, a software architect in Alexandria, Virginia

“After getting my first car in high school, my mom and stepdad added me as an authorized user on their card so I could fill up the gas tank.

While I only used the card sparingly, I was happy to have it at my disposal—plus my parents figured it was a great way to start building my credit from an early age.

Fast forward to 2011, when I graduated from college. I hadn’t used my mom’s card in five years, and I didn’t have any consumer debt of my own.

RELATED: When’s the Right Time to Give Your Kids Credit Cards?

So when it came time to buy my own car and look for a job, it didn’t set off any alarm bells when I learned my credit score was in the 600s. I figured it was due to a lack of robust credit history.

But just to be on the safe side, I decided to pull my credit report for the first time ever—and discovered $20,000 worth of delinquent credit card accounts!

"The whole experience taught me a lesson about the potential dangers of commingling your finances with someone who isn’t your spouse."

It didn’t take long to uncover the root of the issue. My mom and stepdad were hit particularly hard by the recession, and filed for bankruptcy in 2008. Somehow, their debt wound up on my credit report, thanks to the fact that my name had once been linked to theirs through that credit card.

Was I angry with my parents? Not at all—they were as shocked to learn about it as I was. But I did want to get to the bottom of the situation.

As frustrating and inconvenient as it was, I felt pretty confident that, from a legal standpoint, I'd be in the clear. I'd only been an authorized user, not a cosigner. And I was a minor at the time the card was issued.

After a little Internet digging, I learned I was right. My next move? Set the record straight.

The erroneous account had been picked up by two credit bureaus, which meant I needed to reach out to both individually. Doing so was a straightforward process that I handled completely online—all I had to do was click a few buttons explaining the mix-up via each bureau's website.

About a month later I was notified via mail that both bureaus had removed the charges from my credit report—and my score spiked from 680 to the mid-700s.

The whole experience taught me a lesson about the potential dangers of commingling your finances with someone who isn’t your spouse. There are just too many risks—and a great potential to do harm to your credit. That's something I plan to teach my own kids one day too.”

RELATED: 6 Credit Mistakes Even Those With Stellar Scores Can Make

This story was updated on January 6, 2017.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the individuals interviewed or quoted in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

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