Your credit report offers detailed insights into your debt management. It’s common to find a comprehensive list of loans and credit cards opened over recent years. However, there are instances where unforeseen entries appear on your credit report, sparking concerns about potential identity theft. Although identity theft is a possibility, these entries might be legitimate and negatively impacting your credit profile.
Categories of Unexpected Entries on a Credit Report
Typically, an unexpected tradeline—an account listed on your credit report—may result from a missed payment as per the contract. Even with an impeccable payment record, surprises may occur. The following are potential entries that could influence your credit score:
- Unpaid charges for subscription services such as Netflix, Spotify, Blue Apron, or BarkBox.
- Overlooked membership fees from the gym or homeowners association (HOA).
- Unauthorized hard inquiries.
- Charged-off bank accounts.
- Unsettled rent payments.
- Inclusion of someone else’s credit history information.
In most scenarios, when you cancel a credit card linked to a subscription service, your access to the service is usually terminated. Nevertheless, there have been instances where companies, such as Netflix, retain access and pursue overdue payments.
Similar repercussions can arise if you default on payments for your gym membership, HOA fees, rent, or maintain a negative balance in a checking account for an extended period. Typically, the individual or organization to whom you owe the debt won’t immediately report the missed payments; rather, they may involve a collection agency, which then reports the delinquent account.
The timeline for these accounts appearing after a missed payment is indistinct, but they tend to materialize after a delay of three months or more for most cases. Additionally, it’s feasible for your credit report to feature erroneous data linked to another individual, particularly if you share the same or similar names. Imperfections occur, even within the creditor and credit bureau systems.
Moreover, while creditors routinely conduct credit score checks during loan or credit card applications, initiating a bank or utility account may also trigger a hard inquiry on your credit report.
Some unexpected credit report items may signal fraud
While a few surprising or unusual items on your credit report might be legitimate, others could indicate that someone has misappropriated your Social Security number. This can enable unauthorized individuals to open credit accounts in your name. Should they accumulate debt under your identity without making payments, it can severely damage your credit history.
Responding to Unexpected Credit Report Entries
When encountering anything unusual in your credit report, scrutinize the information attributed to the creditor. At times, you might not recognize the company mentioned. This situation could arise if it’s a debt collection agency acting on behalf of a known entity. However, it might also be a red flag for fraudulent activity or a clerical error.
Contact the listed company to gather further information about the account. If it’s evident that the debt isn’t yours, file a dispute with the credit bureaus to expunge it from your report. In the case that the account is indeed yours, take immediate steps to bring it up to date. While this may not entirely reverse the harm, it can prevent further deterioration of your credit status.
To prevent unwelcome surprises, ensure that you stay current with all your financial commitments. After canceling a credit card, bank account, or acquiring a new number, make sure to update your information across all your accounts to ensure prompt payments.
Lastly, regularly review your credit report to monitor the listed information, particularly if you observe a decline in your credit score. You can access a free credit report from each of the three primary credit bureaus—Experian, Equifax, and TransUnion—via AnnualCreditReport.com.