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Dealing with Common Errors on Credit Reports

By Ruth Racey
Published: Friday, September 4th, 2009

Credit reports reflect the spending behaviors and habits of American cardholders and consumers. These reports provide many institutions like credit card companies and banks an overview of a consumer’s financial situation. Continuous extension of credit and loans are based on the cardholder’s performance and credit score. This makes reports crucial for Americans who want to have good credit histories.

By law, only three major credit agencies are authorized to collect information and issue credit reports to consumers. This allows the federal government to closely monitor and regulate how information is collected to protect the privacy of cardholders.

Consumers can also ask each credit bureau for reports once a year. Due to the large volume of information that these agencies have to collect and organize, some errors can make it to cardholders’ credit reports. Most of the time, these mistakes are caused by overloaded systems and even human miscalculations. In some cases, however, errors are signs of even worse causes.

Purchasing products through the internet, mail, or by phone can be convenient for many cardholders. Merchants and companies also take delight in this kind of transaction because they receive payment instantly. Refusing to accept any deliveries or purchases made does not turn back the hands of time. What a consumer has bought will automatically be charged to their cards and recorded in his or her credit history.

Because credit bureaus rely on the information forwarded to them by banks and card issuers, any purchases will also be reflected in a consumer’s credit report. Although the cardholder may not actually have the product, it has already been charged to his or her card.

In some cases, the description of a purchase does not match those in the records of credit bureaus. There may be discrepancies in the amount, dates of purchase, and item description. Any of these factors can result in erroneous credit reports. Consumers should also keep track of their purchases and keep their own records and documents as proof in the event of suspected mistakes.

The third and worst cause of mistakes in credit reports is identity theft or stolen cards. Some card fraudsters can lift information from card statements and even social networking sites. They can then replicate credit cards and use them to purchase expensive products or services. Within just a few hours, cardholders can rack thousands of dollars of unwanted purchases on their cards. To avoid detection and capture, swindlers usually discard credit cards before they are reported stolen or compromised.

In any case, consumers have to file formal written complaints to their credit bureaus to straighten things out. Valid errors have to be fixed in 30 days or less as mandated by the law.

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