Is your name Moshe Braun or Malky Fried? When your name is mentioned – is the first question people ask: “which one”? Leah’s or Sury’s? Are you one of a large family with ten cousins sharing the first and last name?
A caller Rivky Friedman*, a common heimishe name, shared by many in our community, recently called us with the following story. She has great credit and is always on top of her bills. She applied for a mortgage, being positive for an instant approval. However, the mortgage broker notified her that there is a serious delinquent Sprint bill on your credit report that’s damaging her credit, and stopping Rivky from her dream home. She claims she never had a sprint phone in her life, let alone never paid late. How did this get on to her report?
Welcome to the Heimishe credit problem: Mistaken name merging.
Inaccuracies in credit reporting affect millions of Americans. A 2013 Federal Trade Commission study found 1 in 5 consumers have errors on their reports. While name merging is a mistake that can happen all over, its percentages are way higher in the Heimishe community where name and city location sharing are so common.
The credit bureaus collect financial information about you from lenders. Any business with which you have a credit account, such as a bank, auto loan company or mortgage provider, regularly updates the credit reporting agencies whether or not you’re repaying your debts. Other billers, such as cell phone providers, utility companies and medical dues won’t regularly update the credit agencies. They will only update the agencies should your account go late or seriously delinquent.
Rifky Friedman may have never had a Sprint Bill. However, her cousin with the same name or any other Rivky Friedman out there might have had. And if they paid late that might have landed on your report.
According to the National Consumer Law Center, a nonprofit advocacy group, the credit bureaus use mathematical algorithms, involving a partial name match and only part of the digits of a person’s Social Security number, to match a name with all the accounts they are sent. Problems arise when the credit bureau mistakenly matches one person’s overdue debt to another person with a similar name.
Just recently, Chaim Friedman* a newlywed called in to GoldMine to apply for his first credit card. He was declined even for a secured card. At our advice, he contacted Experian to get a free copy of his credit report. We were shocked to read the report! 12 (!) accounts open, mostly heavy delinquent. After a couple of questions, the problem was found. There is another Chaim Friedman* living in the same apartment building. The credit bureaus really had a confusion. Not just did they mix up one specific account, but his full report was false on his name.
We constantly find these problems, especially with common names. While it is less likely to happen with credit card accounts, as they usually have the full accurate info, it is highly common with telephone, utility or similar bills that end up by collection agencies. The collection agencies, lacking full accurate info, just send in name and address to the credit bureaus with the derogatory info. The credit bureaus try to match it to the most common file. A name and area of living might be enough.
According to the National Consumer Law Center, they do this because they want to make sure that every account associated with a consumer gets included. The agencies maintain that a partial match is a more foolproof way of getting a complete picture of a person’s history of repaying debts.
What you need to do, is to dispute the information. In Rifky’s* case it was quite simple. A phone call to Sprint, who’s number was listed on her report, resolved the matter. In Chaim’s case it was a bit more difficult. Instead of working with each creditor, Chaim worked with Experian by sending them copies of identifying info to separate their reports.
A person with a common name always stands vulnerable that some different account with a similar can pop up on his report. Keep on monitoring your report for inaccurate info.
Let me finish the article with something sweet: we’ve had in the past a caller being approved for his first credit card with an unusual high credit line. After investigating the reason it turned out that a positive credit card account, from someone with a similar name appeared on his report. So, you might just be the lucky one to benefit from a common name.
*Name changed for obvious reasons