Lots Of Credit Reports Have Mistakes. But Good Luck Getting Yours Fixed.

[mfcorey1]

http://www.huffingtonpost.com/2015/02/02/credit-report-mistakes-never-get-fixed-bureau-disputes_n_6579820.html

Erica Alvarez’s life was turned upside down in 2011, when a handful of overdue hospital bills showed up on her credit report. Interest rates for her credit cards skyrocketed. She got turned down for a car loan, an apartment and multiple student loans.

But Alvarez, a 29-year-old doctor and resident of Washington, D.C., says the bills aren’t hers. She says the charges are from the maternity ward of a hospital in Texas that she’s never been to.

What’s more, Alvarez has never given birth.

Outstanding debts on your credit report damage your credit rating, that three-digit number that plays a key role in many Americans' financial lives. Lenders, creditors, insurers, landlords and utility companies use your credit rating to determine how financially responsible you are. A bad rating can mean you'll have to pay thousands of dollars more to borrow money.

Studies have found that tens of millions of Americans have mistakes on their reports. And those errors can be long-lived. A study by the Federal Trade Commission released last week found that about 12 percent of all U.S. consumers dispute items on their reports that they believe to be inaccurate, but never see those inaccuracies fixed. Consumer advocates say that’s because the credit bureaus, which build your credit report, don’t try hard enough to correct mistakes.

“Furnishers” are businesses that deliver information about how well you pay your bills to hundreds of consumer reporting agencies across the country, including the “Big Three” -- that is, TransUnion, Experian and Equifax, which each have more than 200 million files on people. Furnishers include loan companies, utility providers and debt collectors.

It was a collection agency called Paramount Recovery Systems that allegedly told the nation’s biggest credit bureaus about how Alvarez supposedly owed more than $1,000 in hospital bills. Debt collectors like Paramount Recovery Systems buy old debts by the thousands -- mostly from creditors and lenders, like credit card companies, that have given up trying to collect them -- and the information that comes along with the bundles of old bills they buy is often scarce. Sometimes, it’s just plain wrong. Federal regulators say that debt collectors are responsible for more disputes than any other group that provides the information that makes up credit reports.

Mark McLean, the owner of Paramount Recovery Systems, declined to comment to HuffPost, citing pending litigation.

But not all the blame lies with debt collectors and the other companies that provide information about people to credit bureaus. It rests also with the bureaus themselves, consumer advocates say, for uncritically accepting what data furnishers tell them. Advocates say the bureaus often don’t conduct a reasonable investigation into disputes, even though federal law says they must.

“The credit reporting dispute system is a travesty of justice,” said Chi Chi Wu, a staff attorney at the National Consumer Law Center, in testimony before Congress in September. “It is a perfunctory process that consists of nothing more than forwarding the consumer’s dispute to the furnisher, and parroting whatever the furnisher states in response.”

Marie Asgian, 49, knows this better than most. She had a perfect credit history until two years ago, when she noticed that civil judgments for $19,000 worth of debt had started appearing on her Experian credit report.

[louis-t]

1. I sell Real Estate. Almost every credit report I have ever seen

has mistakes.

[ForgoTheConsequence]

2. I'm fighting this right now.

I had decent credit until collections for a 4,000 dollar Comcast bill showed up on my credit report. I've never had Comcast and I've never lived in California. With the amount of effort I have went through to get this off my report you would think it was my fault.

[Xithras]

3. Had this happen. Even when fixed, the damage can be lasting.

I had an 790 credit score and three low-balance, high limit credit cards, owned my own home, had never been late on a bill, etc. In 2003 I had a defaulted car loan from North Carolina show up on my credit report. I've never even BEEN to North Carolina, much less bought a car there.

Almost immediately, two of my three credit cards cut my credit limits to match my current balance, and the third closed the card completely. All three also nearly doubled my interest rates. My bank also shuttered a revolving line of credit that I used to finance purchases for the business I owned at the time. Again, I'd never been late, and they were reacting only to the new credit item.

After a two months of faxing documentation, getting the runaround, and waiting for responses, the creditor finally relented, acknowledged that the debt wasn't mine, and removed it from my credit report.

The problem? I still had one card on my credit report that showed as "Closed by lender" with an outstanding balance, and two others that showed balances at the limit (and maxed out cards are a huge credit hit). With interest rates at nearly 30%, I was getting screwed every month, and none were willing to raise my limit back up or lower the interest rates. When I tried to apply for new cards, the companies refused because my existing cards were maxed.

In the end, my wife had to open a pair of new accounts in her name, we shifted the existing balances onto those cards, and just closed my two remaining accounts out. After they showed up as payoffs on my credit report, I reopened a new credit card and began to rebuild my credit.

Unfortunately, because my report still showed multiple closed accounts and new lines of credit, my credit score still suffered. At one point, it dropped into the mid 720's. I took a 70 point hit through no fault of my own. It took almost three years for my score to climb back up where it had been.