To a question about the one thing that young people should be doing about money, legendary investor billionaire Warren Buffett had famously said “I tell them two things, generally. One is stay away from credit cards… The second thing I tell them is to invest in themselves”. It may be easier for the Oracle of Omaha to walk the talk, but not to many. If not splurging, there may be times when one has to pull out the credit card and spend more than what one earns, as necessitated by some unforeseen event. Perhaps, only nominally we are free individuals, but every move, every transactions we make are recorded whether we know or not. Your diligence in paying up your debts add up to your credit score, a ready reckoner in many a finance related decision.

You may be surprised to know that about 80 percent of the credit reports contained inaccuracies, in a 2004 study from the U.S. Public Interest Research Group, and about a quarter of them had mistakes that could potentially trigger a denial of credit. The gospel that the credit agencies go by is therefore not sacred and is subject to errors. The errors can be of many types, viz: Name and Credit report mismatch, accounts showing as paid late that actually were paid on time, incorrect payment history, fraudulent accounts opened by someone else, wrong report with the right name (report of a namesake), wrong personal information, closed accounts still showing as active, etc. It is therefore in the interest of the account holder to verify the report is in order and get it rectified from a concerned agency.

One of the reasons why people become victims of credit report errors is identity theft. Identity theft is a nuisance that has taken gigantic proportions. Identity theft occurs when someone uses your name, SSN, bank /credit card account number, or other identifying information without your knowledge, often to open accounts, commit fraud or other crimes. It is such a horrible experience to go through, that taking ample measures to prevent such a scenario is well worth its time and effort. One might go on a spending spree using your credit card or bank account to buy things; get a new credit card in your name and spend but never pay back; take loans in your name; possibilities are endless. It is not surprising therefore to know that one’s personal details are sold in the back market! Proper discipline such as not handing out personal information (SSN, account numbers, mother’s maiden name, etc over the phone or internet, not verifying the credentials of the receiver; either safe-keeping all the bills, reports etc or shredding them before throwing; learning what is phishing and being on the alert etc, helps protect ones identity.

Francis & Mailman, P.C. is a law firm in Philadelphia, Pennsylvania, that concentrates in consumer litigation. The firm represents consumers in the areas of unlawful credit reporting, debt collection practices, identity theft, unfair trade practices, breach of warranty, truth-in-lending and other consumer matters.