Consumer Reports advises consumers to closely check their credit reports for errors, as complaints of errors have increased dramatically over the past year.

Complaints about credit reports made up over 50% of all consumer complaints to the Consumer Financial Protection Bureau (CFPB) in 2020. Incorrect information on credit reports was the top complaint according to the CFPB.

In response, CR is partnering with a group of consumer organizations to launch Project Credit Checkup to help consumers review their credit reports and provide advice on what to look for and how to correct errors. if they find them. Consumers can register for the project on cr.org/creditcheckup

“Credit report errors are all too common and can seriously and lastingly harm your financial security,” said Syed Ejaz, policy analyst for Consumer Reports. “A mistake on your credit report can make the difference between a high or low interest rate on a loan, or even preventing you from being hired for a job or getting an apartment. Credit report errors have long been a problem, but they are particularly harmful now for those struggling financially during the pandemic. “

Consumers who sign up to participate in the credit check will play a key role in a people-focused research project by completing a brief survey to report on their experience. Consumer Reports will analyze this data and use it to hold the credit bureaus accountable for the accuracy of the credit reports. To publicize the solvency record, CR partners with Americans for Financial Reform, Consumer Action, National Association of Consumer Advocates, National Consumer Law Center, and USPIRG.

Common credit report errors include accounts or loans that have been repaid but appear as overdue, individual loans listed multiple times, and debts incorrectly reported in collections. Even the wrong address or the wrong date of birth on a credit report can cause consumers trouble. Other errors can be particularly serious, such as “mixed files”: when information from another person with a similar name or social security number appears in the wrong report or when fraudulent accounts are listed in a report as a result of identity theft.

A new issue has arisen due to the way some companies incorrectly report postponements during the pandemic. The CARES Act, the law passed by Congress last March to help those who lost their jobs or their income during the shutdown of the economy, requires businesses that provide mortgages and student loans guaranteed by the federal government to offer deferred payments to borrowers. Other financial companies have voluntarily offered deferrals. The CARES Act requires businesses to report deferred payments as current to credit bureaus if the borrower was up to date before the deferral. Unfortunately, some companies, including Navient, one of the largest student loan managers, have occasionally erroneously flagged these deferred payments as overdue.

The financial consequences of credit report errors can be significant, especially for those already grappling with the economic downturn triggered by the COVID-19 crisis. Mistakes in a credit report can hurt your credit score and prevent you from getting a loan or credit card or trigger a high interest rate on borrowing money. Damaged credit scores can also affect your hiring or renting an apartment. Cell phone companies and cable companies review credit scores and may require a larger deposit to sign up for the service if your score is not high enough.

Consumers have the legal right to request a free credit report once a year from each of the three major credit bureaus at annualcreditreport.com. In addition, these agencies provide free weekly online reports until April. If you find any errors in your credit reports, CR recommends that you take the following tips:

* Prepare litigation documents for each bureau: The three major credit bureaus – Experian, Equifax, and TransUnion – do not communicate with each other, so it is a good idea to contact them each. Filing a dispute with each credit bureau, instead of the lender or the bank, offers protections governing how quickly it should be dealt with. It also provides a legal avenue to sue credit bureaus and creditors or collectors, if necessary.

* Gather evidence: If you file a dispute about an incorrectly reported debt, include account statements or payment statements. Credit bureaus can dismiss claims without sufficient back-up information as “frivolous.” And resubmitted claims may be refused if they are considered similar to the previous ones.

* Create a paper trail: Write a letter explaining the problem. Avoid using standardized online forms provided by credit bureaus, which could over-simplify your dispute by forcing you to choose from predetermined checkboxes. Additionally, by submitting your dispute online, you may unwittingly waive your right to sue as an individual or in a class action lawsuit.

* Send all documents by certified mail: Keep copies for yourself. This makes it easier to confirm that the credit bureaus are meeting legal deadlines. Credit bureaus have five days to forward the disputed information to the financial institution or debt collector that provided the information. If that company does not investigate and respond to the dispute on time, the credit bureaus are legally obligated to remove the information.

* If you lose your dispute, consider working with an experienced lawyer: you can sue a credit bureau or financial institution for credit report errors. Find a lawyer through the National Association of Consumer Advocates at consumeradvocates.org