Lenders review every mortgage applicant’s credit report to evaluate their ability to repay a loan and their overall creditworthiness. Your credit report — and credit score — can make the difference between a loan approval or denial and the interest you pay on your loan. If the errors on your credit report lower your credit score, you could end up paying a higher interest rate for the life of your loan.
Consumers are frequently reminded to check their free credit reports online to look for errors. A recent investigation by Consumer Reports found more than one-third of consumers found mistakes in their credit reports. While not every error can derail your loan application, a false negative item on your report could make it more difficult to qualify and delay your purchase process while you try to get the mistake fixed.
Consumer Report’s Credit Checkup project, which included nearly 6,000 consumer volunteers who checked their reports, not only found numerous mistakes. Many of the consumers also had difficulty getting their free credit reports online, and others said they were unfairly charged for services.
Credit report errors
Complaints about credit report mistakes are among the most frequent types of complaints to the Consumer Financial Protection Bureau (CFPB) and have more than doubled since 2019, according to Consumer Reports. Errors range from incidents of identity theft to information from someone with a similar name or Social Security number getting mingled on your report. Your credit profile can also be damaged by misinformation such as accounts or loans that you have paid in full that appear unpaid, debts incorrectly reported as in collections or listed several times.
In Consumer Report’s investigation, 29 percent of consumers found incorrect personal information such as a wrong name or address. Eleven percent found account information errors, most often an account they didn’t recognize.
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