How a Split Credit Report Can Hurt Your Score

February 11, 2010

Most Americans are more aware than ever about the importance of good credit, which often has huge financial and personal implications--for the kind of mortgage rate you can qualify for, the deals you can get for auto financing, even whether you can rent a home. The first step to improving your credit or applying for a credit card, car loan, or mortgage should always be to check your credit report yourself.

In order to qualify for the best credit cards with low interest rates, cash back benefits, or other rewards credit cards, consumers will need to demonstrate that they are responsible with credit. A good credit score and clean credit report will go a long way to demonstrating you are able to handle a new credit card.

Federal law says that consumers are allowed to review a combined credit report from all three major credit reporting agencies (TransUnion, Experian, and Equifax) for free once every year. The report can be ordered at www.annualcreditreport.com.

The first thing to check when you receive your report is whether you have what is known as a "mixed" or "split" credit report, meaning the report contains information about another individual.

Common Reasons for a Mixed Credit Report

Why might you have a mixed credit report? There are some common situations that lead to such a report:

  1. Relatives with the same name. This occurs particularly when people forget to add "senior" or "junior" when completing an application for a credit card.
  2. Clerical mistakes. For example, a credit card company or loan officer may have misspelled a name or an address or transposed numbers in a social security number or credit card account number. Personal information such as a previous address can sometimes be entered incorrectly.
  3. Mistakes through marriage. Married couples should have separate, individual credit reports. If an incorrect social security number is linked with the wrong spouse, a merged credit report can be generated which will have inaccurate credit scores.
  4. Co-signing a loan for children or others. If you've co-signed a loan, this may result in a mismatch of social security numbers to the wrong individuals.
  5. Common names. People with common names--possibly the same people who sometimes get erroneously flagged on airport lists--are particularly vulnerable to mixed credit reports. It can be so easy for credit card companies or lenders to accidentally add the wrong middle initial or leave out an initial that might differentiate you from someone else.
  6. Frequently misspelled names. Individuals with names that are often misspelled should be especially careful to check that the information on the report is accurate. For example, the name Sara is also frequently spelled Sarah, so consumers with easily confused names should be extra vigilant of their credit reports.

When you view your combined credit report from all three agencies, be sure to carefully review each number on the report and match it with your current credit cards, current and previous addresses, and social security number.

If you have ever looked at your credit report, you already know that they are not easy to read. However, setting aside the time to review your report once per year and at least 60 days before applying for that new low-interest credit card or other type of credit will give you a chance to correct mistakes.

Each credit reporting agency has a method for consumers to inform them of potential errors. Instructions can be found with your report and online on the website of each agency.

A phone call may seem like the easiest way to start fixing problems on your report, but usually errors must be fixed in writing. It can take several weeks or even a month or two to correct mistakes, which is why getting your report in plenty of time before you apply for credit is so important.

Here's how each credit reporting agency establishes individual credit reports, with the bulleted lists showing how they rank the importance of each piece of information in assuring accuracy:

Experian

  • Last name
  • First name
  • Social security number
  • Address

Sometimes Experian shows additional names and addresses or even the additional social security number of someone on a mixed file.

Equifax

  • Last name
  • First initial
  • Social security number
  • Address

Sometimes Equifax will report two credit scores on a mixed or split file, particularly if the file is split because two names (i.e. married and maiden name) were used for the same person.

TransUnion

  • Zip code
  • Address
  • Last name
  • First name
  • Social security number
  • Alias or alternate name or alternate spelling

TransUnion will typically only identify additional names, addresses, and possible accounts that do not belong on the credit report, but not extra social security numbers.

What are steps to take to correct mistakes on a credit report at all three agencies?

  • Write a letter stating the information you believe is inaccurate.
  • Include copies of documents which support your position.
  • Include a copy of your report with the items circled.
  • Send the letter by certified mail with a return receipt requested.
  • Keep copies of your dispute letter and all documents.

After you've reported the mistakes to the credit agencies, you should take these additional steps:

  • Write to the appropriate creditor or information provider explaining that you are disputing the information provided to the creditor.
  • Include copies of all documentation.
  • Request the provider copy you on all correspondence with the credit bureau.

The process of correcting errors can take between 30 and 90 days, so prepare to be patient.

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