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Mismerged credit reports can lead to unjust consumer credit denials

Many Virginians faced serious economic losses during the COVID-19 pandemic, followed by another financial challenge from household budget-busting inflation. For some whose credit scores also took a hit, it may have taken months of careful money management to rebuild credit to a level robust enough to support applying for loans, credit cards, mortgages or other types of debt.

Imagine the frustration of being in this position and having your credit applications denied or learning that you must pay a higher interest rate because of your credit score. Upon investigation, the consumer may discover that the credit denials and poor credit scoring were based on an erroneously mismerged credit report.

Merged reports in the lending sector

Lenders, especially mortgage lenders, may request three-bureau reports that combine potential borrowers’ credit information from the three major credit bureaus: Experian, Equifax and TransUnion. Each bureau may have different information about a consumer and combining them into one merged report may be more comprehensive and informative to a lender making a decision about creditworthiness.

Third-party firms normally create merged reports available to lenders (usually mortgage lenders) for purchase.

Mismerging of credit information of two different people

Unfortunately, sometimes a glitch occurs in which the report creator mistakenly merges the information belonging to two different people. This can make a person’s credit score look terrible when it is not, but the person with whom they have been mismerged in the report may have a dismal credit history. Mismerged information can make credit unreachable for the consumer inheriting the problematic financial data of the other. False information about a person’s financial health can also harm their reputation in a way that could cause long-term harm.

Mismerging may be more likely if two parties have the same or similar Social Security numbers (SSNs) or names, reside in the same place or are related. Errors on a credit report may not only impact the perceived creditworthiness of the consumer, but also harm chances of employment or of obtaining a governmental security clearance.

Legal representation is a smart option

Any Virginian who suspects that their credit report data may be mixed with that of another consumer or that it otherwise contains mistaken or false information should speak with a skilled consumer protection lawyer. An attorney can work to have the reports corrected and erroneous information transmitted to third parties revised and reevaluated. Legal counsel can also assist the consumer in recovery of money damages for harm flowing from the errors. If requests or negotiation do not resolve these issues, the lawyer can advise the consumer about potential lawsuits.