Risk Factors for Mixed Files—Names and Neighborhoods
One of the major types of credit report errors is a mixed file, which occurs when the credit reporting agencies combine information from multiple individuals. This error often occurs when individuals share similar names, social security numbers, addresses, birth dates, or other demographic details. The credit reporting agencies are more likely to mix consumers’ files when they live in a geographic area in close proximity to each other. Even if the names and social security numbers are not a complete match, the credit bureaus may still mix the files because their policies favor including more information at the expense of accuracy, to the detriment of consumers.
Ethnic neighborhoods are often located in large cities, which have high population densities. The high population density increases the likelihood that a consumer will live near another individual with a similar name or social security number. A compounding factor is that individuals from similar ethnic backgrounds are more likely to share similar names. As a result, if you live in a crowded neighborhood with a large ethnic population, you may have two factors increasing your likelihood of a mixed file error in your credit report—similar name and similar location.
Financial Havoc but No Quick Fix
If you are unfortunate enough to have your credit information combined with another consumer in a mixed file, it can cause havoc to your financial life. The other person’s unpaid bills, bankruptcy, or repossession could drastically downgrade your credit score and prevent you from purchasing a home, renting an apartment, or getting a job. Even worse, no easy solutions exist for consumers to remove erroneous information from their credit reports. Consumers file tens of thousands of complaints every year with the Consumer Financial Protection Bureau over credit report errors, and some consumers spend years trying to fix the errors without success.
Steps to Reclaim Your Credit Report
If you discover incorrect information in your credit report and suspect the credit reporting agencies mixed your file with another consumer’s file, then it is important to take action to correct the error right away before you experience adverse financial effects. You may want to contact the credit reporting agency and file a dispute of the claim. You may also wish to contact a credit report error lawyer to assist you with the challenges that may arise.