It depends on the scoring whether you get a loan or whether you can have a rental apartment. Even a simple cell phone contract cannot be given a bad score. The reason for this is one or more negative Credit bureau entries. However, these are not always justified.
Most Credit bureau entries are of course legitimate. Sometimes you forgot to pay an invoice, sometimes there was a delay in loan repayment, and the banks don’t want to grant a loan or landlords – sign a housing contract. But some entries are unauthorized. It is often a simple human error. And these can be of different types.
Just as an example: there are several thousand millers in Germany. And one or two millers are sure to have the same date of birth. This can lead to confusion. The similar addresses could also ensure that mistakes are made at Credit bureaus.
The other most common errors are due to entries that were not deleted in time. So it can happen that a paid loan still appears as a more open loan in Credit bureau. Delay in data entry can be one of the reasons.
Obtaining free self-disclosure from Credit bureau once a year should be the rule. Even if the method cannot guarantee that an error does not creep in between the information, you can at least reduce it.
Furthermore, you can always contact Credit bureau if you discover any errors and have them corrected. Banks or other financial institutions can also be the point of contact if an error wanted to be clearly identified on their part.
The mistakes are not always seen and corrected immediately, so sometimes only the way to an ombudsman or even to the court helps. However, the methods are more the exception than the rules.
Unauthorized Credit bureau entries can be serious for those affected, because it is not always about a credit card application that is rejected or a cell phone contract. Rather, it can be a matter of life-essential things, for example a rental apartment that you cannot get through a wrong Credit bureau entry. In such cases, consumers are protected – at least in theory – because they can sue the person who caused the damage.
It is more up to the judge to decide who will lead the case and whether the total damage will be replaced. However, the companies are aware of the risks, so that every single report to Credit bureau is carefully checked to avoid the situations mentioned above.