Credit Report Errors with Student Loans and Data Breaches

So, when was the last time you checked your credit report for errors? Are you in the habit of doing it every year like I am? I even receive alerts if there’s any change in my credit report, and that’s important for several reasons. For one, data breaches are becoming more common. The other reason is that credit report errors are common, which is what happened with student loan servicers Nelnet and MOHELA.

First, I wrote a prior blog post that approximately 30% of the time, there are errors in credit reports. Second, there have been a significant amount of data breaches lately. I’m a victim of one myself—$3,000 was charged to my credit card. But because I also receive alerts, I know of any changes to my credit report or charges.

• Your Credit Report Probably Has Errors

Student Loan Servicers Nelnet and MOHELA Caused Credit Report Errors

Unfortunately, a huge, if not costly, credit reporting error affected millions of student loan borrowers. What happened was simple enough: if you had student loans with Nelnet, those loans were transferred to MOHELA. However, the error is that the three major credit reporting bureaus, Equifax, Experian, and Transunion, weren’t notified of the transfer. This means the debt was duplicated.

For example, if you owed $50,000 to Nelnet, that was reported to the credit bureaus, but now another $50,000 in student loans would also be reported with MOHELA. So now it seems you owe $100,000. This can destroy your credit score.

So, review your credit report to ensure there are no mistakes. Even if you don’t have student loans, I still want you to check your credit report because data breaches and errors can wreak havoc on your credit score, costing you money in the long run, whether with higher interest rates or deposits.

• Identity Theft and Massive Data Breach. How to Protect Yourself

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Also, since we are near the holidays, I wish everyone a happy and safe holiday season.

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