Credit reports and incorrect information - what to do

A current study shows that nearly eighty percent of credit reports have errors. According to the law, the credit bureaus are supposed to respond to a complaint about incorrect information within 30 days, but in practice, it might take a lot longer than that. The credit report problems that take the longest to repair are those where the lender or creditor insists that the information is correct, even if the individual can prove otherwise. Some of the more difficult examples frequently have to do with confusion as to identity or identity theft, or simply plain, old, routine typographical errors. Although credit report errors regularly are negligible in substance, up to 25% of reports have errors that are significant enough to keep a person from obtaining credit or a loan.

What occurs when credit report information isn't correct? Credit information, sold to financial institutions in the form of a credit report, tells lenders what they need to know before they decide whether or not to lend money or offer credit to a customer. Today, everyone, or most everyone, knows that their financial lives are contained in information compiled by the three main credit bureaus - Trans Union, Experian, and Equifax.

If credit report information is false, it can take a long time to correct, and meanwhile, the ability to take out a loan is seriously compromised. Many, if not most lenders rely, probably too much, on data contained in a credit report.
 

Many, if not most common mistakes are swiftly corrected; quickly repaired problems involve erroneous addresses, ages, phone numbers, and etc. Cleaning up a few mistakes can take a long time, because of the complexity of the information involved.

Wrong identity - Being alive may seem like a straightforward thing to prove; after all, a phone call from the living should indicate otherwise, but that does not seem to be the case. There have been cases of consumers who couldn't get loans because the credit bureaus thought they were dead. Most of the time, credit reports that indicate the person is deceased are a case of mistaken identity, but if there's a death certificate involved, it may take telephone calls, attorneys and even lawsuits to resolve. If the credit bureaus believe you are dead, you are out of luck, as nobody will loan money to someone who is dead.

There does not seem to be any federal legal remedies on the horizon to help straighten this situation out, but it would be nice. While these matters are being sorted out, the person's FICO, or credit score score is hurt, and he can't get a loan, or a credit card, or perhaps a job or a home. With increased dependence on computer generated financial information taking over our lives, the minimum the bureaus could do is help to make sure that information is accurate. Legislation to fix the problem of incorrect information seems unlikely, though, as The legislature is currently quite happy with some of their recent monetary legislation, for example the bizarrely named bankruptcy law of 2005.