If you've taken the time in the last few years to educate yourself about the potential problems that can arise from mishandling your credit, you probably also know that your scores can sometimes drop through no fault of your own. Thousands of people across the country recently learned that the hard way thanks to an error from a well-known housing giant.
The government-sponsored mortgage-backing enterprise Fannie Mae recently went through an issue in which its system could not differentiate between people who had been foreclosed upon by their lenders and those who had participated in a short sale simply to move away from an underwater property, according to a report from MarketWatch. That, in turn, could have erroneously diminished those borrowers' credit scores by hundreds of points, and left a black mark on their credit reports for a period of up to seven years.
About 2 million homes sold since the housing downturn began five years ago were short sales, and make up 25 percent of all distressed property transactions nationwide, the report said. The problem, too, is that this error took a long time for anyone to even spot, before U.S. Sen. Bill Nelson wrote to both the Federal Trade Commission and Consumer Financial Protection Bureau about the issue. Now, following an upgrade to the GSE's software slated for November 16, the problem should be resolved.
"This is the nature of the evolution of this business," Fannie Mae spokeswoman Keosha Burns told the financial news site.
This incident just serves to underscore the importance of taking the time to order copies of their credit reports as often as possible. By doing so, you will be able to get an overview of all the accounts being listed in your name, including your payment history, how much you owe, and so forth. But at the same time, you may also be able to spot any potentially unfair markings that could be having a negative impact on your credit scores overall. If you find any such entries you don't recognize, you might want to contact a credit repair law firm about the issues as quickly as possible. These organizations may be able to help you sort out the problems more quickly than you could have on your own, and in doing so more easily return your scores back to where they deserve to be.