Cleaning up credit errors not always an easy task

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It's a nightmare that impacts millions of consumers.

Your credit may be damaged - or even ruined - by mistakes that you didn't make.

A new government study found 20 percent of consumers had an error in a credit report issued by a major agency. The Federal Trade Commission study says five percent of those errors could lead to paying more for mortgages, auto loans or other financial products.

So when this happens, how can you get it fixed?

13 investigates found getting your credit cleaned up, in some cases, may not be as easy as you would think.

More than four years and a mountain of paper correspondence later, Terry Bible of Indianapolis is still fighting to correct her credit history.

"Oh my God, my first call in 2006 was to the Federal Trade Commission," said Bible. "How many other people besides myself has this affected?"

Her case, now with the FTC, is possibly among an estimated 40-million mistakes consumers found on their credit reports.

Medical bills sent to collection for debts not owed, evolving credit card accounts linked to the wrong person and collection agencies reporting debts consumers no longer owe.

"Oh, it doesn't surprise me at all," said Bible.

But the president of the industry group representing the credit bureaus says the numbers aren't as bad as you think.

"Forty-million observations on the front end is very different than the number of consumers that might have a credit report that contains a significant error," explained Stuart Pratt the CEO and President of the Consumer Data Industry Association.

Pratt says one in every five consumers the FTC found with errors on their credit histories will actually see the error cost them money, whether in higher credit rates or flat out credit denials.

The association flat out denies reports that credit mistakes often go unanswered.

That's little consolation for Terry Bible.

13 Investigates first reported on her case in 2009. She discovered TransUnion had listed one loan transaction as two open accounts. The same loan amount of $28,000 dollars showed up twice and ruined her credit score.

"TransUnion left off the four numbers and reported the loan 30 days later," Bible told 13 Investigates in 2009.

"So it looks like two different accounts on your credit report. It was actually one?" questioned 13 Investigates.

"It was actually one," Bible confirmed.

What should have been an easy fix, went uncorrected and no one took responsibility.

With her credit ruined, Bible tried to file a federal lawsuit to recoup her losses, but it was too late.

Bankruptcy proceedings had already kicked in.

Now, as she awaits help from the FTC and President Barack Obama's new Consumer Financial Protection Bureau, TransUnion has yet to admit to the mistake.

"No credit bureau is going to want to see double reporting the way you've described. We've got measures to fight against that," Pratt said in response to Terry Bible's case.

The credit bureaus say 95 percent of consumers go away satisfied, but they and State Consumer Protection advocates say there's still work to be done.

"It's important to know that five percent of these issues are significant and that people need to do something about it," said Abigail Kuzma with the Indiana Attorney General's Office.

All consumers are urged to check their credit reports once a year. It is important to write a letter of dispute to your creditor, send copies of your documented proof, not the originals and send the information by certified mail to ensure it has been received.

The Consumer Protection Division with the Indiana Attorney General's Office can also help you through the process.

Disputing errors in your credit report