Sarah from New York was living her best life. She had secured a new, high-paying job in her industry, and just put in an application for her dream apartment. Everything was looking up until she found out the application had been denied.

The reason? She was declared dead.

Sarah’s credit card company had mistakenly marked her as deceased. After six weeks of lawyer’s visits, doctor’s notes and gathering other documentation to prove she was alive, she found all the stress had been due to an error made by the company in recording another person’s death — someone with the same name, but a different middle initial.

While it may sound like a fluke, about 12,000Americans are mistakenly marked as deceased each year by the Social Security Administration alone, according to Consumer Litigation Associates. That means thousands of Americans could be walking around with “credit ghost” status, often without even knowing it.

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How could this happen, and how common is it?

Mistakes on credit reports are shockingly common. According to the Federal Trade Commission, one in five Americans has an error on their credit report, and around 5% of people are affected by issues with their credit score that could cause them to be denied or overcharged for a loan. Most of these mistakes are mundane, like incorrect addresses, misspelled names or outdated account info. But when the error is more extreme, like being marked deceased, the fallout can be intense.

This can happen when a financial institution or government agency incorrectly reports a death to the major credit bureaus, usually because of a mix-up with someone of a similar name or Social Security number. Sometimes the mistake originates with the Social Security Administration, which maintains the Death Master File used by credit bureaus, insurers and other agencies.

Once that incorrect status hits your credit file, it can set off a domino effect that touches nearly every aspect of your financial life. You might:

These kinds of disruptions can be financially and emotionally overwhelming, and they typically require significant effort and documentation to fix.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How you can avoid becoming a statistic

Because this could happen to anyone at any time, the most you can do is check your status now to avoid finding out at an inopportune moment. Here’s what you can do:

Being mistakenly declared dead isn’t just a clerical hiccup, it can derail your finances, housing and career in a heartbeat. The best defense is vigilance. Don’t wait for a rejection letter to discover you’re a credit ghost. Sarah urges, “Take it from me: Check your credit report regularly!”

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.