Don Davis email: dond@htlnw.com Ph: 360-652-9994

 It seems incredible that something that can control your financial future is   devoted primarily to an automated system.  But yet it seems that this is the way the credit reporting system is designed. 

Somewhere a clerk (data entry, typically not a high paying job) at the lender or creditor sets up your account and what gets reported to the credit bureaus.  Sounds simple enough?  They just make sure that your account is reported with the correct information and you would have to think that they double check things like the spelling of your name, social security number, address and so on…against the information you have listed in your credit report.  WRONG! 

Somewhere the credit bureau receives this information and surely someone would check it against what is on your credit report.  Things like the spelling of your name, address, social security number and so on…WRONG!

 Here’s the way it usually goes.  A clerk enters the information in to a data base that gets sent to the credit bureau.  Never mind that they spelled the name wrong or that it may not even be your account, it just goes in.  Next the credit bureau receives that information and compares it against other people with similar names, address and social security numbers (not necessarily all of those and not necessarily in that order). Sometimes if it seems close the credit bureaus computer puts it on your report.

This is what happens daily and why there are almost 80% of the credit reports with errors.  Almost 30% have errors serious enough to deny credit, even though the report is completely wrong.

Such is the case with Mr. John Spanger (changed the name for privacy reasons, but its close) John Spanger lives in Bothell, Washington and works in Redmond.  There just so happens to be another John Spanger who lives in Idaho (in a suburb outside of Boise).  The Idaho Spanger has a motorcycle loan and two credit cards that are listed on John Spanger of Bothell’s credit report.  Two years ago John Spanger of Bothell mailed and emailed the credit bureaus the errors and asked that they “investigate” and clear the Idaho Spanger items from his credit report. The bureaus send an account challenge to the creditor and the creditor compares what the bureau says and what they say.  Unfortunately the info the bureau has and sent the creditor is what the creditor sent the bureau, so guess what?  They match and the account stays the same.

In this real life instance, John Spanger of Bothell is trying to buy a home.  The motorcycle and credit card of John Spanger of Idaho are paid on time and the payments are not enough to substantially increase his debt load so the application is submitted simply with a letter of explanation stating that the motorcycle loan and the credit card aren’t his. But he has no proof.  The application is submitted, he finds a home and the file is sent to an underwriter to clear the loan and get it closed.  Even with the erroneous accounts there shouldn’t have been a problem.  But, alas, the snake came out of the grass and bit him.  John Spanger of Idaho missed a payment on his motor cycle that showed up when the underwriter pulled a credit report just prior to clearing the loan. (The underwriters do this to make sure that nothing has changed in the borrowers financial life that would add more debt or missed any payments that may lower a score).  The original credit report was clean without any late payments on any account.  5 weeks later the credit report had updated for the prior month and now shoed a 30 day late on the motorcycle.  LOAN DENIED.  

This file isn’t closed yet as this gets written.  We are fighting with the credit bureaus, creditor and underwriter to prove the account is not his.  we have provided each of them information provided by John Spanger of Idaho to help prove the account is not John Spanger of Bothell.  Incredibly the information provided is an entirely different social security number and since John Spanger of Bothell is in the Washington State National Guard we have also provided a history of where he was posted.  Of course the Washington National Guard doesn’t post personnel in Idaho and all the postings and residential addresses were entirely in central and western Washington State.  Was this good enough for the creditor and the bureaus? Not yet.  The challenge once again came back that the account belonged to John Spanger and it remained on both John Spanger’s credit reports.  We are however pretty certain that the underwriter now can see a clear picture and has the original contract from John Spanger in Idaho and it appears that the loan may actually close, albeit a couple of weeks late and an added cost to both the buyer and seller.

The moral of the story is; check your credit reports often.  Make certain absolutely everything on the report is yours.  If there are ANY ERRORS start working to get them corrected now.  Do not give up until the credit report reflects an actual image of what you have and the accounts are yours and yours alone.  If you wait or hope the errors go away, you may wait a very long time.  It can also cost you if any of the information can hurt your score or your chance to obtain credit or insurance or even a job.

 

Don Davis