Credit report errors are much more common than you may think. According to the Federal Trade Commission, five percent of consumers may be seeing credit scores that are 25 points below where they should be as a result of errors. By law, you are entitled to a free copy of  your credit reports each year so take advantage of it.  The last thing you want to have happen is to get rejected for a loan when you need one.

Below are five credit report errors that may be sinking your credit score

The Incorrect Social Security Number

Lets say you apply for a loan and they enter in the incorrect social security number. This is a credit report error that can really cause damage. If the erroneous number belongs to someone else, that person’s credit history, including their missed payments, can become merged with yours.  This obviously means you will not get approved for that loan.

Credit Card And Loan Payments

About a third of your credit score is determined by your payment history.  As a result, even one late payment can do serious damage to your credit score. The back-office operations at the credit card companies and loan companies, where your payment information is processed, can be the source of errors as well. These mistakes can cause your payments to be inadvertently applied to another customer’s account, causing your account to show up as past due. A review of your credit report will help you determine whether this has happened to you.

If you find yourself in this situation, you will need to send copies of your processed checks or payments to the credit card issuer or lender to prove you made payment.  You then need to contact the credit card bureaus with proof of the payment processing error.

A Mistaken Address Or Name

A mistaken address can cause just as much damage to your credit score as any other credit report error. Just as with social security numbers, this mistake creates some risk that your credit history will be merged with someone else’s. This could lead to a variety of issues.  Especially if the person has a lien against them or some other type of negative reporting.

In order to avoid issues, you need to always use the same name for yourself.  You should not be switching between “Bob” and “Robert,” for example.  In addition, you need to confirm that your name is correctly listed each time it is used in your credit reports.

Fraudulent Account Operation

Here we are looking at identity theft and not really a mistake.  This type of credit error involves finding a credit line that you did not open. If this has happened to you, you should put a freeze on your credit.  This will prohibit anyone, including you yourself, from opening any new line of credit. Retain the freeze until you have figured out what has happened.

Give Yourself A Financial Checkup

Checking your credit report annually is the best way to safeguard against credit report errors.  Take advantage of your free credit report every year and avoid negative surprises that can lead to negative credit.