There's Debt in My Name, but It's Not Mine

Credit report errors can have a huge and negative impact on your overall credit score. If left unchecked, they can prevent you from being able to take out loans or open new lines of credit, plus lead to other problems.

Some credit reporting errors may cause creditors to pursue you for debt that is in your name, but that’s not legally yours. These situations can be confusing and stressful, so read on to learn what to do and how to get rid of debt that you aren’t obligated to pay.

Why Can Inaccurate Debt Appear Under Your Name?

Imagine a scenario where you receive a “payment due” letter in the mail. It claims that you owe a debt to a company you’ve never done business with before. When you look at the bill or demand for payment, you see your name at the top. For example, your name is “John Anderson,” and the name of the bill’s heading is also, “John Anderson.”

This could be an inaccurate debt that has been erroneously assigned to you. There are two primary reasons why this can occur.

Deliberate Malfeasance

Not all creditors are honest organizations/individuals. If a creditor’s borrower skips town or doesn’t pay their debts, they may try to collect money from the easiest individual possible: a person with the original debtor’s same name. This is illegal, but it’s still a scheme to watch out for.

Credit Reporting Error

It’s much more common to have inaccurate debt appear under your name because of a simple credit reporting error. In these cases, the creditor reports a missing or late debt to the credit bureaus. The credit bureaus then file the debt under your name if you share the same name as the original creditor.

Armed with this information, the creditors then reach out to you to get the debt paid back. While this can be annoying or frustrating, it’s a basic mistake that can be corrected with a few similarly basic steps.

Why Bother Disputing Debt That’s Not Yours?

If you're pursued for a debt that isn't yours, but which is nonetheless under your name, you need to dispute it because:

• The creditors may continue trying to extract money from you by calling you, visiting your home, etc.
• Your credit score will be lowered so long as the outstanding debt is recorded in your file. 

The faster you get the matter cleared up, the faster your credit score will be fixed

Between these two negative effects, you should dispute any debt that isn’t yours quickly. The longer you let it sit, the harder it may be to dispute.

What to Do if You’re Pursued for a Debt That Isn’t Yours

If a creditor, like a bank, loan shark, or other organization claims that you need to pay a debt that isn’t yours, you can handle the matter by following the below steps.

Double-Check That the Debt Isn’t Yours

First, make sure that the debt isn’t yours. You might have an initial gut reaction that a big bill under your name doesn’t belong to you. But bills can slip through the cracks or you may have inadvertently/accidentally signed up as a co-signer for a loan previously.

For example, say that you offered to co-sign the student loans for your nephew. You rarely speak to that side of the family. Unbeknownst to you, your nephew has failed to pay back their student loans. So creditors reach out to you to get their payments. In this case, the debt really is yours, even though you were not expecting it and were unprepared for it.

To make sure the debt isn’t yours:

• Double-check your credit reports from each of the three credit bureaus: TransUnion, Equifax, and Experian
• Read through all the information included in the debt letter or claim letter. 

This may help you identify where the debt came from or what it pertains to

If the debt is yours, you are legally obligated to pay it back to the best of your ability.

Request a Debt Validation Letter

If the debt isn’t yours, you should request a debt validation letter/debt verification letter from the creditors in question. Creditors are legally obligated to provide you with a debt validation letter within five days of first contact.

The debt validation letter will explain why the creditor believes you owe the debt in question. You can request this letter online, by phone, or in person depending on how the creditor contacts you.

What to Ask for in the Debt Validation Letter

When asking for a debt validation letter, be sure to ask for:

• Clear documentation that you owed the debt in the past, like a contract with your signature
• A breakdown of how much you owe and the last outstanding action on the debt, such as a payment, an acknowledgment that the debt exists, etc.This can be shown with documents like a bill or last statement
• The authority that the collections agency has.

You’re specifically looking for a license to do business in your state

If the creditor does not provide you with verification of the debt, they can’t keep trying to collect it from you. Take this as a sign that the creditor has given up or silently agreed that they made a mistake.

Dispute the Debt in Writing

If you receive the debt validation letter, you have 30 days to take action, after which the creditor assumes the debt is valid and may keep trying to collect it from you.

Your next best step is to dispute the debt in writing. Send a credit dispute letter both to the creditor and to the three credit bureaus (or one or two of them depending on which credit reports the error shows up on).

The credit dispute letter should include a detailed explanation of the situation, plus any supplementary evidence you have showing that the debt doesn’t belong to you, like proof of you living at a different address when the debt was originally taken out/a contract was signed.

Within a few weeks, the credit bureaus should recognize the error and remove the inaccurate information from your credit report. 

If the Creditors Don’t Stop…

What if the creditors for the inaccurate debt won’t stop hounding you? In that case:

• Send a written complaint to the company explaining the situation.

Include digital or photocopies of the proof that you aren’t the debtor they are looking for, such as examples of your previous address

• Offer to send a copy of your council tax bill to the local court or county bailiff.

This will prove that you're not the person they are looking for and subtly hint that you will get the law involved if they don't stop

Either or both of these methods should be enough to get the creditors to stop pursuing you.

Do Creditors Have to Report an Error to the Credit Bureaus?

Creditors are legally obligated to report errors they make to the credit bureaus. For example, if they reach out to you for a debt that isn't yours, and you show them you aren't their original borrower, they should report that information to the credit bureaus at the earliest possible opportunity.

However, not all creditors take this step, even though it is illegal for them to skip it. Therefore, it’s always in your best interest to investigate your credit report from each of the credit bureaus personally. That way, you can make sure that the inaccurate debt is removed and your credit score is no longer negatively affected. 

Summary

If you’re pursued by a creditor for debt that isn’t yours, ask for proof that the debt is in your name. If they furnish that proof, submit a dispute letter to each of the credit bureaus that have the inaccurate information. That should clear up the issue and restore your credit score to its accurate level.