Photo (cc) by Crystl
The Federal Trade Commission released a report yesterday (though it says December 2012) examining the accuracy of consumer credit reports. Credit reports are used to create credit scores, which are those magic numbers that determine our ability to get credit cards and loans of all kinds, and the terms that come with them. Needless to say, it’s important for that stuff to be right.
But it often isn’t, the report found. The study involved working with 1,001 randomly selected consumers who in most cases reviewed three credit reports each – from Experian, TransUnion and Equifax. 26 percent of participants reported a “material error” – something that affected the credit score, not a typo in the address or something inconsequential – on at least one of their reports.
Worse, for five percent of the participants, the mistake put them in a greater credit risk tier than they belonged, meaning they were probably paying higher interest rates than they should have been, and may have had smaller lines of credit or more denials than expected.
These errors are easily corrected for those bother to try. Everyone is entitled to a free annual credit report from each of the three bureaus, and when viewing them online you can also quickly file complaints. Four out of five consumers who filed disputes got their credit report fixed, according to the FTC study. Need help with your credit report or score? Check out the links below.