Don’t ignore that weird address on your credit reports, do this instead

Your credit report is a crucial component of your financial life because it shows your level of creditworthiness to lenders, which can determine whether you will achieve financial goals like buying a home or a car.

Unfortunately, your credit report can contain inaccurate personal information, including your identity and address. Any wrong personal information could be a red flag for serious problems like identity theft. Find out how you can identify anomalies on your credit report and actionable steps you can take to prevent fraud that can negatively impact your credit history.

What does incorrect address mean?

An address that is not yours may appear on your report if you co-signed a loan with someone else and the loan contains their address. However, the signatory’s address is not a cause for concern, but a “strange” or unknown address where you have never lived before should be corrected as soon as possible.

Human error can cause an inaccurate title to appear on your report, notes Josh Rechner, founder of debt relief agency FaithWorks Financial. “Sometimes, inaccurate information appears on your credit report due to a simple input error by a lender or creditor,” Richner says. “However, there are usually lines of credit associated with the unknown address in fraud cases.”

Additionally, the person who used your name and Social Security number to apply for credit has committed identity theft. The individual may provide an address other than yours on the loan or credit application. In turn, the lender may submit inaccurate information to the credit bureaus.

Also, some scam artists will send you a change of address to the USPS to have your mail delivered to them. These scammers use information such as your personal data to commit identity theft.

Consequences of incorrect address

Your address can’t affect your credit score, at least not on its own. Your credit score includes information from your credit report, including:

• Number of late payments
• Number of credit accounts
• The length of your credit history
• The total amount of debt you owe

“The title alone doesn’t affect your credit score, but it can still cause problems,” Richner says. “If the address on your report does not match what is on your loan or credit card application, the lender may pause or decline the application to investigate further.”

All of this assumes that you are not a victim of identity theft. However, take immediate and proactive steps if you cannot explain the discrepancy in the address.

What to do if you find discrepancies in addresses

Notify the credit reporting agency, and let them know that you dispute the inaccurate address on your credit report. Tell them you have never lived there and don’t know who currently lives at the address. You can dispute inaccurate addresses online.

For example, Experian provides a portal through which you can initiate disputes. If Experian determines that your dispute is accurate, Experian will remove the address from your report.

The FTC suggests contacting the company or lender associated with the account with the wrong address. It should be removed from their records. The company must investigate and notify all three credit bureaus on your behalf if the information is indeed inaccurate. Of course, you will need to close the account associated with the fictitious address immediately.

Looking through your credit report can ensure there’s nothing else strange, like late payments you know you didn’t make or accounts you don’t know about.

“One of the best ways to protect yourself is to freeze your credit,” Richner says. “This prevents new credit from opening in your name unless you temporarily raise it. It takes a little effort to manage, but the protection it provides is worth it.”

You may also want to start a credit freeze, which prevents anyone from accessing your report without your permission. You can flag your credit report with a fraud alert as well, which requires creditors to impose extra security measures to verify your identity for anyone who tries to open an account, request a credit limit increase, or apply for an additional credit card in your name.

Bottom line

Any discrepancy on your credit report can be a headache, even if it’s not a significant cause for concern, as in the case of identity theft. Monitor your report constantly and vigilantly even after the problem is resolved. You can get free copies of your report regularly at AnnualCreditReport.com. Review your report from each of the three credit reporting agencies, as you may find information in one report that does not appear in another.