Credit Report Disaster

You would not believe the nightmare I’ve seen clients go through, when they realized someone else’s bad credit history was showing up on their report, causing them to be declined for the loan the should have easily qualified for. Little did they know that every time someone on the other side of town made a late payment, or decided not to pay at all, it was being added to their credit report.

Believe it or not, I’ve even seen one specific case where “Mistaken Credit Identity” forced someone into bankruptcy! That’s right, a lady came to me wanting to apply for a new home loan. Unfortunately she had recently lost her job and her bills were starting to pile up, and her reserves were running low. Luckily, or though she thought, she had plenty of equity in her home that she could access through a home equity loan, to pad her bank account and give her plenty of breathing room until she landed a new job.

To her shock and dismay, I pulled her credit report and informed her that she did not qualify for the loan. She was in disbelief. “I’ve never had a late payment in my life”! she exclaimed. I told her her credit score and begin listing off the multiple derogatory entries that were listed. She couldn’t believe what she was hearing. How could this happen?

It happened because she had a very common last name, and also shared a very similar first name to another individual who lived not far from her, and even had a very similar social security number. Unfortunately my potential client had not applied for a new loan of any kind for several years and had no idea that these errors had been piling up. As a matter of fact, the errors were so severe that despite literally months of working with her to get the errors corrected, we couldn’t wash them away in time. Her financial situation had sprialed out of control and she was ultimately forced into bankruptcy.