As you’re probably already aware, your credit file is the single most important feature about you that reflects your creditworthiness. The information contained in your credit file is used by banks, lenders, and other financial institutions to make decisions about how much money you can borrow, at what interest rate, and under what borrowing terms.
It’s not uncommon for many consumer lenders to rely solely on the information contained in your credit file to base their decisions about lending to you. For this reason, it’s especially important that the details of your credit file are accurate and up-to-date.
Unfortunately, because the consumer credit tracking system in the United States is prone to error, credit files can often become compromised with false data. When this happens, one of the most common reasons is confusion with another person’s identifying information like a name, address, or date of birth.
When credit information about one person is erroneously ‘mixed in’ with the credit file for another person, this is called a Mixed Credit File, and it can become a serious problem if it’s not addressed quickly and effectively.
So, what can be done to prevent a mixed credit file situation from happening in the first place? And, what can you do about a mixed credit file if one makes its way into your credit profile?
Understanding the Credit Reporting Agencies (CRAs)
To help inform your decision making process when it comes to resolving a mixed credit file situation, it will help to understand how credit reporting works at a high level.
Here in the United States, there are three principle Credit Reporting Agencies, or CRAs. They are Transunion, Equifax, and Experian.
These three agencies are chiefly responsible for collecting information about you submitted to them by private lenders or other companies with a stake in your creditworthiness (i.e., landlords, collection agencies, hospitals, etc.).
In order for a mixed credit file situation to happen, the data furnisher can either incorrectly report to the CRA credit information about an individual, or the CRA can erroneously enter that data into the public credit file they maintain for you.
In either case, a mixed credit file is most likely going to harm the borrower in question, and it’s almost never going to be their fault that this happened.
Preventing Mixed Credit Files
Most people who discover that their credit files have become entangled with someone else’s don’t realize this until they’ve already attempted to get a loan or other consumer line of credit. It can come as a shock in many cases, and resolving the issue can take weeks or months.
To prevent a mixed credit file situation from happening in the first place, it’s advisable to conduct a monthly review of your credit file on a regular basis, even if you don’t plan on applying for a loan in the near future.
By doing this, you’ll be able to detect errors in your credit file before they create embarrassing problems for you when the time comes to approach a lender for money.
Many credit card companies provide free credit reports for their cardholders. Check with your credit card issuer to see if they have programs like this you can leverage. Also, credit monitoring services like LifeLock.com offer a paid service that alerts you to changes made to your credit profile when they happen.
However you do it, be sure to maintain at least a monthly vigil on your credit file, and make note of any questionable data you find. Often, the money you pay for credit monitoring services is worth the peace of mind you get in return.
Correcting Mixed Credit Files
Transunion, Equifax, and Experian all provide ways you can file mixed credit disputes online. This is something you can do the moment you notice something is ‘off’ about your credit file.
If you know who your credit file is mixed with (often, it’s a family member or someone close to the affected consumer), this information can speed up the resolution process.
The good news is that once one of the CRAs has been notified of a mixed credit file, they will often share that information with the other CRAs, reducing the amount of work you as the consumer will have to do to restore your credibility within the credit reporting system.
However, some mixed credit situations can be especially complicated and may require assistance from a consumer law attorney. In cases like this, we recommend contacting our offices for a free consultation.