The credit reporting system isn’t perfect. Just ask Ken Clark from Little Rock who was turned down for a vehicle loan and accused of being a con man by the auto dealer because his credit report was marked “deceased”.
Credit reporting errors like these are surprisingly common, and this makes sense in a system where so much information is exchanging hands everyday. Even errors with a “one in a million” chance of happening will happen 3,500 times every month when you factor in the 3.5 billion pieces of account information the credit bureaus receive from lenders per month.
Then factor in systemic flaws in the system and credit errors are much more common. For example, the algorithms used to match loans to credit files use partial matches in some cases. Because of this, someone else’s loan could end up on your credit reports if your name and Social Security numbers are very similar.