FTC: Credit Report Errors Rampant, May Be Costly for Consumers
You may want to check your credit report for errors, because they're apparently quite common. And in some cases, consumers are paying the price for those discrepancies, according to the FTC.
A new study by the Federal Trade Commission reveals that 1 in 20 American consumers had a mistake on their credit reports that could have increased their interest rates on things like home loans. The mistakes could also affect insurance premiums, reports Reuters.
In its report, the FTC encourages people who check their credit reports from the three largest agencies -- Experian, Equifax, and TransUnion -- to check for mistakes.
Overall, the FTC found about 26% of consumers found a mistake in one of their three credit reports; 21% successfully requested their report be revised, writes Reuters.
For about 5% of consumers, the mistake on the credit report was so significant that it affected how they were viewed as a credit risk, thereby affecting loan terms.
Experian's response acknowledged that while there were mistakes in the reports, in most cases they did not affect credit scores and sometimes they even benefited consumers. It's doubtful that those negatively affected by these credit-report mistakes took any comfort in this statement.
Your credit report and score has taken on a growing importance. For example, if you apply for a car or home loan, the loan officer will request your score and the amount of interest you pay will be directly linked to your score.
So you will want to ensure that your score is accurate. Some steps you can take can include:
- Checking your score on an annual basis.
- Contacting the credit reporting agency immediately if you notice any discrepancies.
- Reviewing your bank and credit card statements regularly.
If you have been harmed by a mistake on a credit report or discover that you have fallen victim to fraud, you may want to contact a consumer protection attorney. An attorney can help assess your case and figure out how to get your situation resolved.
- FTC Says 5 Percent of Consumers Have Credit Report Errors, Leading to Costly Consequences (ABC News)
- Top 3 Ways to Fix Your Credit Report (FindLaw’s Common Law)
- Credit Report Items Scaring Off Lenders (FindLaw’s KnowledgeBase)