New reporting from the CFPB indicate credit report errors are on the rise in 2021. If you were one of the fortunate, you were able to save money during the pandemic and are looking to purchase. Before you submit an application, however, experts say that you should pull your credit first.
Related: How to pull your credit report for free.
“You want to have a heads up on what is on your current credit report,” says Consumer Spending Report finance reporter Angela Offerman.
Credit Report Errors Dominate CFPB Cases
Credit reports errors are very common. A 2017 study found that one in three people has one error on their report, and one in five have multiple errors.
While reporting errors are not a new phenomenon, the amount of cases about this problem to the CFPB has reached record levels during the COVD-19 pandemic.
Last year, at the beginning of the pandemic, the deferral government offered a lifeline to people who were struggling financially. Companies that offered federally backed loans, including mortgages, student loans and some credit card and car loans, provided deferral options without a late payment penalty.
“But what’s happening,” said Offerman, “is it’s causing confusion and it’s leading to those deferred payments. These credit report errors are becoming quite worrisome”
Those incorrect late payments on your credit report could negatively affect your credit score, and your chances of getting a loan. It is all happening at a time when people need it the most.
“People are struggling monetarily and looking for lenders to loan them survival money,” said Offerman. “And when they apply for a loan, they are being denied because of these credit report errors.”
Offerman says that is why you need to check your own credit report before you apply. You can do that for all three credit bureaus: Equifax, Experian and TransUnion and for free at annualcreditreport.com.
Checking your own credit, Offerman says, will not affect your credit score. She says that if you notice an error on your credit report, the first thing you should do is write a certified letter to the credit bureau and include any proof you might have that a mistake was made.