Common Credit Report Mistakes That Cost Consumers Money

Jul 16 2026

Written by Sandy Yong is a licensed CFEI® & award-winning author with a proven track record of success

Common Credit Report Mistakes That Cost Consumers Money

At some point you will need to apply for a loan, get a credit card, rent a home, or apply for a job.. And all of these milestones have one thing in common: they require either a lender, landlord, or employer to approve your application. And a key component in each of these approval processes is your credit report. How you build and manage your credit is a key indicator of how reliable you are with managing your money, paying back your loans and managing your credit.  In essence, your credit report is a proxy of your reliability and responsibility.

Have you ever wondered what happens if there are errors in your credit report? Errors can negatively affect how much you can borrow, whether you’re accepted as a tenant, and whether you will receive a job offer. In my experience as a landlord, I always do a thorough screening process with potential tenants. I ask for a copy of their credit report and credit score, which gives me a good overview of how responsible and reliable they are with borrowing money. So, an unfortunate error, could be a reason I deny a tenant the opportunity to move in.

Simply put, mistakes in your credit report can be reasons to deny key life moments, like getting an apartment or a job. Mistakes can also cost you money (and lots of it over the long-term). Credit report errors could lower your credit score. And when you have a low credit score, you may pay more in interest payments on a car loan or mortgage. 

How do you monitor your credit report and what are the top mistakes to look for when you read your credit report? I’ve compiled a list of the common errors to help you resolve these issues and save you money in the long run. 

Unauthorized Accounts:

An unauthorized account on your credit report is a credit card, loan, utility account or something similar that has been opened in your name by someone else. This typically a result of identity theft. That said, they can also be the result of a clerical error or credit file mix up. Regardless of the reason, if you find accounts that you personally didn’t open, it's something you have to take care of, and quickly.

For instance, you may discover fraudulent credit cards or loans that were opened under your name without your knowledge. Hackers or scammers may have stolen your personal credentials to take out loans or lines of credit in your name.  It’s also possible that accounts that belong to someone else with the same or similar name as yours ends up on your credit report (known as a mixed file). With identity fraud being prevalent these days, it’s even more important to check for any suspicious activity on your credit report.

If you do find what you believe to be unauthorized accounts, take the following steps to have it removed

Contact the company that made the inquiryReport and document the fraud by going to IdentityTheft.govNotify the 3 major credit bureausPlace a fraud alert on your accountDispute the unauthorized account with each bureau that has the information in your report.

Inaccurate, Late or Missed Payments:

You know it's important to make all payments on time. You know that late payments can hurt your credit. However, you may find transactions that appear as a late or missing payment on your credit report. Late payments could remain on your report for up to seven years. And payment timing is one of the major factors that determine your credit score. Even one late or missed payment will likely hurt your credit score. So, if you find this mistake in your report, you’ll want to get it fixed promptly. 

To dispute an inaccurate late or missed payment, you will have to compile evidence to support your on-time payment. Gather your bank statement, cancelled checks or payment confirmation messages to prove the payment was made on time. Then contact the credit bureaus and submit online dispute claims to support your claim. Also reach out to the original lender and inform them of the error and ask them to contact the credit bureaus to correct their mistake.

Personal Information Is Wrong or Outdated:

If you’ve ever changed your name or moved, it’s important to keep your identity information up-to-date. A study by Consumer Reports found that 34% of people found errors related to their personal information in one ore more credit report. Your name might be misspelled. Or your phone number or address could be wrong. Also, there might be incorrect employers listed. 

While this doesn’t directly impact your credit score, it may cause delays or lead to mistrust among potential employers or landlords during the screening process. 

Paid Debts That Are Reported As Outstanding: 

You paid off a debt or settled it. However, in your report, it still shows a balance. It’s important to note that even after you paid off a debt, the balance could stay on your credit report for up to seven years. However, if it’s past that timeline, it means that the original creditor or the collection agency did not update your file. 

You might also discover a debt that has been listed multiple times under different names or various debt collectors. These types of errors make it seem as if you’re not as reliable with paying off your debts. 

Incorrect Account Balances:

If a lender reports that you owe more than you actually do, it could look as if you’re carrying more debt than you really have, regardless of the fact that you’re paying your bills on time.  The impact of this is that with an inflated balance, it could increase your credit utilization ratio.  Your credit utilization ratio is the amount of credit you’re using based on the amount that’s available to you. Keep in mind that a higher ratio could lower your credit score. 

Closed Accounts That Appear as Active:

You may have closed an account with a lender years ago. But it’s not uncommon for lenders to leave paid-off accounts open by accident, meaning they fail to report that you closed the account. As a result, it may look like you have a delinquent account which doesn’t work in your favor. 

Another scenario is when you have a credit card that shows as active, but you closed it long ago. In this case, it appears as though you have more credit available to you than you actually have. 

In Summary:

Your credit report is, essentially, a financial passport. Just like a Government passport verifies. your identity to cross borders, your credit report is used to verify your financial reliability and to tell landlords, mortgage lenders and even employers that you're a reliable option. Managing your credit report is literally managing your freedom of movement in today's world.

Take the time to regularly review your credit reports from all three major credit bureaus and dispute inaccuracies as soon as you find them.

FAQs

What are the most common credit report mistakes?

The most common errors you may find on your credit report are related to identity errors, unauthorized accounts, wrong account statuses, and inaccurate account balances or credit limits. 

What are the credit bureaus in the United States?

In the U.S., the top three credit bureaus are Equifax, Experian, and TransUnion. They take your information about your spending and borrowing habits and build credit reports. From there, they translate this into a credit score. 

How do you fix the errors on a credit report?

If you find errors in your credit report, you should report it to the credit bureau promptly.  You’ll need to file a dispute. You’ll also need to explain which section that you’re disputing and why the information is incorrect. You may need to provide supporting documentation. Then you’ll need to contact the company (such as a bank or loan provider)  and ask them to correct or remove the information that they sent to the credit bureaus. 

Why is it important to have a good credit score? 

Lenders, landlords and employers rely on the credit score (also called the FICO score) of an individual to determine how much to loan you, if they want to rent to you, or hire you. The credit score ranges from 300 to 9000. The higher your credit score, the better terms you may receive from a creditor and affects whether you’ll be able to rent a place, or land a job offer. 

What behaviors result in a lower credit score?

When you have late or missed payments, making only the minimum payments, account balances being sent to collections, maxing out your credit card, and having multiple hard credit cards in a short period of time could hamper your credit score. 

How often should you check your credit report and credit score?

The general guideline is to check your credit history and credit score at least once a year. So much can happen within a one-year timeframe, such as changing jobs, moving to another city, or obtaining a new credit card. Having regular reviews allows you to find errors. Then you can report it and get it resolved in a timely manner. 