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There you are doing the right thing. You ordered a copy of your credit report and are carefully reviewing it. Wait! What’s this? There’s an item you don’t recognize. Is a company trying to dupe you or has your identity being stolen? What if your credit report is rampant with errors?
It happens more often
Unfortunately, this happens more often than you might think. You find a transaction on your credit report you don't believe is yours or maybe it’s on your credit card statement or even your bank statement. Yes, this could indicate your identity has been stolen or, more probably, that an error has been made.
Check the company's name
If you find an item you don't recognize, the first thing that you should do is check the company's name. The reason this commonly happens is because a financial institution or company, whose name you don't recognize, has turned your name over to a debt collection agency whose name you also don't recognize.
The creditor may operate under more than one name
Another reason why this can happen is because a company operates under one name but uses its legal name to process payments. As an example of this, an umbrella corporation that owns multiple jewelry stores happens to own one in your city. These corporations often have numbers instead of names. So if you thought you had purchased a ring from LeMode’s Jewelry but you see a number on your credit report instead of the name LeMode’s, it’s probably because the umbrella corporation processed it this way.
Jump on the Internet
The first thing you should do is go to the Internet and do some research to learn more about the corporation. Is it a debt collector? Could it be the umbrella for a company where you actually made a purchase?
Get on the phone
Second, call the company and ask about the transaction you don't recognize. And be sure to get the name of the creditor that initiated the item.
Get all the details
Third, get all the details you can about the item. Typically this would include the store or location where it took place, what was purchased, the purchase date and the amount of the transaction. This will help you decide if it's something you now recognize or that it’s an error.
If you now recognize the transaction
If after you have done these three steps and do acknowledge the transaction, you need to figure out what to do about it. For example, you might arrange a plan to get it paid off. If you still don't recognize the transaction, you might want to dispute it with the credit bureau or dig deeper to make sure it wasn't the result of identity theft.
How to dispute an error
If you are sure the item in question was an error, you need to contact the credit-reporting bureau and dispute it. The bureau is required to then contact the company that reported the transaction and ask for proof that it was really yours. The reporting company has 30 days to respond to the credit bureau. If it does not, the credit bureau is required to remove the item from your credit report.
Credit bureaus process thousands of transaction reports daily. No matter how diligent they might be, errors can be made. However, just because you don't recognize an item or transaction in your report doesn't mean that a mistake has been made. Be sure to learn why it's there. And don't forget that the name that appears on your credit report may not be the same as the company from which you bought the item.