How to Read Your Credit Report and Fix Errors That Are Hurting Your Score

How to Read Your Credit Report and Fix Errors That Are Hurting Your Score

A 2021 Consumer Reports study found that 34% of participants found errors in their credit reports — and over 29% said correcting those errors improved their score. That's millions of people paying higher interest rates because of mistakes they didn't know existed.

Your credit report is different from your credit score: the report is the data, the score is the number derived from it. If the data is wrong, your score is wrong — and you're paying for it.

Where to Get Your Free Credit Reports

You're legally entitled to one free credit report per year from each of the three major bureaus — Experian, Equifax, and TransUnion — through AnnualCreditReport.com. (This is the only free source authorized by federal law; other "free" sites often require paid subscriptions.)

Since 2021, you can access free weekly reports from all three bureaus through the same site.

Get all three, not just one. Each bureau may have different information. An error on one bureau doesn't automatically appear on the others.

Understanding the Major Sections

Personal Information

Name, current and previous addresses, Social Security number (partially masked), date of birth, employment history.

What to check: Spelling of your name, any addresses you've never lived at, unfamiliar employer entries. Errors here don't directly affect your score but can indicate identity theft.

Credit Accounts (Trade Lines)

Each account you have or have had: credit cards, loans, mortgages, auto loans, student loans.

For each account you'll see:

• Account number (partially masked)
• Creditor name
• Account type (revolving, installment)
• Date opened
• Credit limit or loan amount
• Current balance
• Payment history: typically shown as a grid of months, with each month marked OK, 30 days late, 60 days late, 90 days late, etc.
• Account status: open, closed, in collections, charged off, etc.

What to check:

• Are all accounts accounts you actually opened?
• Are all balances roughly accurate?
• Is the payment history correct? One mistaken late payment marking can significantly affect your score.
• Are any closed accounts still showing as open?

Collections

Debts that have been sent to collections agencies. These are major negative marks.

What to check:

• Is the original debt yours?
• Is the amount accurate?
• What's the date of first delinquency? (Determines when it falls off your report — 7 years from this date)
• Is it showing for both the original creditor and a collection agency? (Only one should appear)

Public Records

Bankruptcies. (Judgments and tax liens were removed from reports in 2017–2018.)

Hard Inquiries

Each time a lender checks your credit for a new application. Stays on your report for 2 years; affects your score for 1 year.

What to check: Any inquiries from companies you didn't apply to — this can indicate someone applied for credit in your name.

Soft Inquiries

Checks that don't affect your score: your own checks, employer background checks, existing creditors reviewing your account. These appear on your report but don't matter for scoring purposes.

Common Credit Report Errors

Wrong personal information: Different name spelling, previous address listed as current, or someone else's information mixed in (especially common with Jr./Sr. suffixes or common names).

Accounts that aren't yours: Identity theft or a "mixed file" where someone else's account appeared in your file.

Duplicate accounts: The same debt appearing twice — often happens after debt is sold to a new collector.

Incorrect payment status: A payment marked late when you paid on time. This is the most damaging common error.

Wrong balances: Account balances don't need to be current to the day, but significantly wrong figures can affect utilization calculations.

Closed accounts shown as open: Paid-off or closed accounts still showing as open and in good standing generally doesn't hurt (positive history stays), but accounts that were closed by the lender or with negative history should be accurate.

Old negative information that should have aged off: Negative marks (late payments, collections) stay for 7 years from the date of first delinquency. If you see something older than that, it may be time to dispute.

How to Dispute Errors

Step 1: Document the Error

Download or print your credit report. Identify the specific error (account number, creditor name, what's wrong, what the correct information should be).

Step 2: File a Dispute

You have two routes:

Online dispute (fastest):

• Experian: experian.com/disputes
• Equifax: equifax.com/personal/credit-report-services
• TransUnion: transunion.com/credit-disputes

Mail dispute (creates better paper trail): Write a letter that includes:

• Your full name and address
• Account number
• Specific error and what the correct information is
• Supporting documentation if you have it (payment receipts, account statements)

Send certified mail, return receipt requested.

File the dispute with each bureau that has the error. They don't automatically share corrections.

Step 3: Contact the Furnisher

The "furnisher" is the company that reported the information (your credit card company, the collection agency, etc.). You can dispute directly with them in parallel to disputing with the bureau.

Under the Fair Credit Reporting Act (FCRA), furnishers must investigate disputes and report back accurate information.

Step 4: Wait for Investigation

Bureaus have 30 days to investigate and respond (45 days if you submit additional information). Most disputes are resolved within this window.

Outcomes:

• Corrected or deleted if the furnisher can't verify the information
• Verified as accurate and remains (dispute unsuccessful)
• Updated with a notation (less common)

If the error persists despite being inaccurate, you can add a 100-word consumer statement to your file explaining the dispute. You can also escalate to the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov.

Step 5: Follow Up

Check your report again after the investigation period. If the error was corrected, verify it's gone. If you provided additional evidence, re-dispute if the first attempt failed.

How Much Can Fixing Errors Improve Your Score?

It depends on the error:

• Correcting a wrongly reported late payment: +20–50 points
• Removing a collection account that wasn't yours: +50–100+ points
• Removing a duplicate account: +5–20 points
• Correcting a balance: Minimal unless utilization was significantly affected

The impact is proportional to how severe the error was.

Making This a Regular Habit

Check your credit reports at least once a year. With free weekly access now available, checking quarterly is reasonable.

Set a reminder in January to pull all three reports, review them systematically, and dispute any errors you find. This 30-minute annual review can be worth hundreds or thousands of dollars in better interest rates over your lifetime.