A few years ago, Reginald Kirtz and his wife struggled to make mortgage payments on a home he bought with a federal loan from the USDA.
Eventually, the house went into foreclosure and the loan was settled. Their credit took a hit, but it was made worse because the lender kept misreporting that payments were overdue.
“Due to that, them reporting that we were making late payments, that just destroyed my credit,” Kirtz said.
A credit score can determine whether you can get a loan for a home, car or credit card. It can also impact the interest rate on the loan. And for the past three years, incorrect information on a credit report has been the No. 1 complaint to the Consumer Financial Protection Bureau. The National Consumer Law Center says about 13% of consumers have errors that affect their credit scores.
“A lot of the errors people find (are) other people’s information gets crossed with theirs, and sometimes they have similar names or similar Social Security numbers,” said Lisa Gill, of Consumer Reports, who has reportedly extensively on the issue.
To make sure your credit report is in good order, you can check it once a week for free at AnnualCreditReport.com. That shows reports at Experian, Transunion and Equifax. You can dispute an error online, but Gill said, for legal reasons, you should go a step further.
“If you find any errors, pull all your documentation together, write a letter, print it out, print all of this out, make copies and send it by certified mail to each of the three credit bureaus,” Gill said.
The Kirtzes hired attorneys to sue the USDA for mistakes on his report, but the federal agency claimed it had immunity. His appeal went to the Supreme Court, which recently ruled in his favor.
“Effectively, their ability to make errors and get away with it has been eliminated,” said Matthew Weisberg, Kirtz’s attorney.
The couple can now go forward with the lawsuit, but it could be months before their case is resolved and their credit can be repaired.
Consumer Reports and the nonprofit WorkMoney have started a project called “Credit Checkup” to encourage consumers to stay on top of their credit reports.