Credit reports plagued by errors – is your score wrong?

Almost one in three people (32%) who have checked their credit report in the last five years have found an error. Which? Research has found.

A national representative Which one? A survey of 4,193 citizens in July 2024 also found that only 45% of people checked their data credit-worthiness In the last five years, even fewer – just 25% – have carried out their inspections Credit report.

But your credit report can contain everything from signs of fraud to false debts, which could harm your financial future.

Credit reporting agencies collect personal information about you whether you apply for credit or not. This information can affect the outcome of future financial applications – and if details are inaccurate, you may not find out until it is too late.

Here we examine the damage caused by credit report errors and what you can do to fix them.

False debts and fraudulent accounts

Of those who have checked their credit report in the last five years, 9% told us they found a record of a non-existent debt.

Debt and defaulted accounts negatively impact your lender’s creditworthiness, meaning you may face rejected applications or outrageous interest rates.

Which? Member Neil Foley told us that he was demonstrating to his friend the importance of checking your credit report when he finally noticed an error on his own credit report.

British Gas had reported a debt that it did not owe. When Neil contacted British Gas he was told that he had no debts on his account and that the matter would be sorted out.

But separately, British Gas told Equifax that the data was accurate and would not change it. Between May and July this year, Neil made seven phone calls to British Gas customer service but was never able to reach a resolution and, in the meantime, an application for a credit card was declined.

According to which one? intervened, British Gas resolved the issue and sent Neil an ex-gratia payment for the inconvenience.

Another Which? Member Peter spent more than two years trying to remove an error from his credit report.

His ordeal began in April 2022 when his credit card application was rejected. His Equifax credit report listed an account he had never had with O2 and whose address was unknown to him. He emailed O2’s fraud team and then received an apology letter from the customer service department confirming that the account would be removed from Equifax.

When Peter checked his report again, the account was still there. He contacted O2 again, who told him to contact Equifax. But Equifax said it was unable to accept notices from O2 customer service – only O2 Fraud – and so could not remove them.

In October 2023, Peter went to the Financial Ombudsman Service. O2 then accepted its mistakes and offered Peter £300 in compensation. But in March this year, Peter received a letter from his credit card provider informing him that his interest rate would be increased due to changing circumstances.

O2’s incorrect entry was re-uploaded to his credit file. The information was removed but re-uploaded. Which? O2 then intervened and O2 removed the default address and the false address from Peter’s file and sent him a further £300 in compensation.

Inconsistencies and duplicates

It’s not just false debt that can clog up your credit report: 8% of people who checked their credit report in the last five years found an incorrect current or previous address.

One Which? A member told us that he was denied a credit card application and upon checking his report found that he had no credit history.

This was because his mailing address, which he provided on his application, was different from his electoral roll address, which was used for his credit report. One gave the name of his village, the other did not – a difference that resulted in him having no credit information at all.

He had to ask the Election Commission to change his address, after which his story appeared and he was accepted for the credit card.

Another 7% of those who looked found attached information that belonged to someone else. An employee of Which? He experienced this when he found his twin brother’s full credit history in his Equifax file while checking before applying for a mortgage.

An error in my own report

When researching this article, I took a look at my own credit reports and, like many others, found an error.

My TransUnion report listed an address in a place where I had never lived – I had never registered to vote there, and I had never set up an account with that address listed.

Luckily, all I needed to resolve the issue was a message to TransUnion saying “I’ve never lived here before” and they responded within a month telling me the address would be removed.

It is not enough to review a report

There are three major credit reporting agencies (CRAs): Equifax, Experian and TransUnion. Each collects their own data from lenders and open sources of information such as the land register and electoral roll.

This means there is more than one version of your credit report and score – something 65% of those we surveyed didn’t know. Your reports may be similar or contain completely different information. It varies from person to person.

Of our survey respondents who said they had reviewed their rating or report, 70% only did so with one provider.

So even if you’ve made the effort to check your score or report before applying for a financial product, checking with a credit rating agency that the lender doesn’t use may not help.

Most lenders simply rely on the information provided by a credit rating agency, but will not tell you which credit rating agency they use. However, some lenders, usually the major high street banks, will consider a second or even third CRA if they do not receive enough information from the first.

• Learn more: What is a credit report?

How to fix an error on your credit report

You can view your statutory credit report for free, but the process isn’t always easy.

The credit bureaus also offer their own paid services to check their reports, offering one-month free trials.

Likewise, you can sign up for a free trial of Checkmyfile.com (it costs £14.99 a month if you don’t cancel) and see all three files at once.

If you find an error in your report, you can file a free notice of correction with the CRA. In it, you will provide a brief explanation as to why the information is incorrect, and the CRA will investigate the information and either remove or reject the information.

It’s especially important to check your credit reports before applying for a credit product because if an application is rejected, your credit score will drop.

• Learn more: How to check your credit score for free

The system needs to be simpler

Which? calls for reform of the credit reporting system to make it easier to find information and correct errors that could have long-term effects on your finances.

The Financial Conduct Authority (FCA) has launched a consultation on ways to make the sector more transparent, inclusive and accessible. As part of this consultation, we pushed for a free, unified portal so that consumers can access all credit reports at once and easily correct errors.

The FCA has set up a working group to take forward the work of the consultation and make recommendations for reform of the FCA. We want the regulator to put forward recommendations that will increase consumer understanding and confidence in the system.

• Learn more: Which? Credit Information Industry Report