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How Do Credit Report Errors Affect Your FICO Credit Score?

Cecily Kellogg November 29, 2018

One of the most frustrating aspects of your FICO credit score is how damaging credit report errors can be. No matter who you are, you likely have enough legitimate credit issues as is. Unfortunately, you can also suffer a penalty for mistakes that aren’t even yours. Instead, various financial institutions can commit an error, and you’ll be the one that pays for it. Below, we explain all of the ways credit reports errors can affect your FICO credit score and give you a simple guide for fixing them.

Missed Payments

One way credit report errors can affect your FICO score is by assigning you missed payments. The results of this mistake are especially damaging because not paying bills on time is the worst thing you can do for your score. There are three ways in which this occurs.

• A Phantom Missed Payment

This is when your report indicates that you missed a payment when you never actually did. Missing payments is the most damaging behavior you can engage in, so getting penalized by one that is in error is no trivial matter. The reason for this mistake is simple: Financial institutions let some things through the cracks. Unfortunately, that thing could be an error that lowers your score.

• Duplication

In this case, you may legitimately miss a payment, but your record indicates that mistake two times. The name for this event is a duplication error, and it happens frequently. Even though the missed payment will be the same as the other one, credit bureaus will not catch the mistake. Instead, it is up to you to keep an eye on your report and correct this mistake when it arises.

• Identity Theft

When you are the victim of this crime, a person will usually open a line of credit using your name and information. Once they get their new card in the mail, they will use it on a variety of purchases. After maxing it out and abandoning it, they leave you with the bill. What is so damaging about this scenario is that you likely will not realize what has happened for a few months. A few missed payments are unremarkable for creditors, so they often do not try to contact you right away. Instead, they wait a few months until your score has already fallen.

Accruing Debt

The same errors that cause missed payments also result in you accruing an excessive amount of debt. This mistake is another way your FICO credit score will drop due to credit report errors. The most common examples of this effect are as follows.

• Not My Debt

Sometimes, a bureau will assign someone else’s debt to you. This mistake can happen due to something harmless, like a similar name, but the results are dire. If that debt is substantial, your score will fall significantly.

• Duplication

Just like with missed payments, bureaus can count your existing debt twice. If you carry a significant amount of it, you’re already experiencing penalties. If that amount of money owed doubles, so does your punishment.

• Identity Theft

As we explained above, identity theft often leads to missed payments. Another consequence of this crime is assigning debt to you. As you can imagine, a fraudster will not pay off the debt they accrued while stealing your identity. Once they move on, you will have that on your record until you solve the issue.

• Overutilization

Overutilization is a concept that is similar to accruing debt. The difference is that it generally refers to how much of your credit card balance you use, rather than the total debt you have. When you use too much or your total credit limit, you end up with a penalty for overutilization. This can happen in error due to two factors.

• Duplication

Often, a business will accidentally charge you twice for a purchase you make. Under ordinary circumstances, the charge will be some manageable amount, and you can fix it without having utilization issues. Other times, the duplicate transaction is worth thousands of dollars, and you start to push your credit limit.

• Credit Card Fraud

In the section above, we explained how thieves open new accounts in your name. Another method they use is charging your existing credit card for their purchases. Sometimes this comes in the form of small, regular payments. Other times, they will make large purchases before you notice that they have stolen your information. An expensive transaction will raise your utilization percentage significantly.

Opening New Lines of Credit

The last way credit report errors can affect your FICO credit score is through opening new lines of credit. Doing so is one of the 5 critical factors that make up your score, so applying for new credit cards will lower your score every time you do it. Unfortunately, you sometimes receive a penalty for doing so when you never made the request.

• Clerical Errors

One danger that you face is credit bureaus accidentally adding a new line of credit to your record. This can occur for a variety of reasons, but the most common is you getting credit for somebody with a similar name applying for a credit card.

• Identity Theft

Again, identity theft is a crucial factor. In this case, it is because criminals frequently open a new credit card in your name when they commit this crime. As we discussed previously, this can cause penalties for missed payments and debts, but another damaging factor is opening new credit in your name.

How to Fix Errors

Credit report errors affecting your FICO credit score can be incredibly frustrating, but there is a solution: Checking your report for mistakes and reporting them to the offending bureau. While it is unfortunate that bureaus won’t fix their errors, you at least have a way of defending yourself. To utilize this method, carry out the following tasks.

• Obtain Credit Report

Before you find errors, you need to request your credit report. This document is where you will find those mistakes, so obtaining it is crucial. To do so, visit and make a request.

• Print it Out

Sometimes, consumers find that they miss errors when they search for them on a screen. This makes sense, as eye strain compromises your attention to detail. For this reason, we recommend printing your report before scanning for mistakes.

• Highlight Errors

For this step, either use a highlighter or make a pen mark on each suspected mistake. One thing you shouldn’t do is investigate a potential issue right away. Instead, read the entire document, making notes along the way. Once you finish, you can look into each error individually.

• Obtain Documentation

The default position of every credit bureau is that they are right until you prove them wrong. This is why asking them for a change without evidence won’t work. They need proof, so you need to give it to them. To do so, gather financial documents that support your claim.

• Write a Letter

At this point, you can send in a letter requesting that your errors be fixed. To ensure compliance with their formatting standards, model your request off of the FTC’s sample.

Credit report errors lowering your FICO credit score is an unfortunate event that may happen to you one day. If it does, you now know how those mistakes might hurt you. More importantly, you also know how to rectify those mistakes and save your score from falling.

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