Errors on your credit report are more common than you think

You know that part of preparing to apply for a mortgage loan involves checking your credit report. You can get a free copy of your report every 12 months from each of the three major credit-reporting bureaus: Equifax, Experian, and TransUnion. So as your application date approaches, take advantage of those free copies to make sure your lender won’t call you with any surprises.

But what happens if you find something that’s not right? Maybe there’s an address listed that you didn’t live at or a credit card listed that you don’t have. Or it could be correct information, such as a bankruptcy from 10 years ago, that should have fallen off your report by now.

If you find a mistake, you’re not alone. According to the office of U.S. Rep. Maxine Waters, credit-reporting agencies maintain files on approximately 200 million adults, and 40 million of those files, or about 20 percent, contain mistakes.

Correcting an error on your report can take time, but the first step is to contact the credit bureau who provided you the report. You should also contact the entity listed as the creditor — the credit union you’ve never heard of, for example. Your lender can advise you through this process.

Once the reporting bureau acknowledges the mistake on your report, it not only corrects its files but notifies the other credit bureaus to ensure the error is removed from your record.

Congress is also considering legislation, the Comprehensive Consumer Credit Reporting Reform Act of 2016, intended to make credit reporting more transparent to consumers. Among its many provisions, the act aims to decrease the time adverse credit information stays on your reports and to remove settled debts quicker.

Of course, legislative changes probably won’t affect your application — unless you’re not getting a loan for several years. So for now, avoid surprises by checking your report and communicating with your lender.