One in 20 American consumers had mistakes on their credit reports that would have increased their interest rates on loans or caused them to pay more for insurance, according to the Federal Trade Commission. Experian, Equifax and TransUnion are the leading consumer credit reporting agencies. The FTC has encouraged folks to check the three reports annually in order to catch mistakes. Some 26% of consumers found a mistake in one of their three credit reports and 21% requested and got their report changed, the FTC said in a 370-page report written at the request of Congress and released on February 11th.
For about 5% of the consumers surveyed, the change in the credit score was big enough to affect how risky a potential lender would view the consumer and what interest rate they would offer, the report said. Howard Shelanski, director of the FTC’s Bureau of Economics, believes the data drove home the need for consumers to keep tabs on their credit history. He said in a statement:
These are eye-opening numbers for American consumers. The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly.
In response, Experian claimed that while there were mistakes in the reports, in most cases they did not change credit scores enough to matter. It says further that in a small percentage of cases a mistake would accidentally raise a credit score in the recipient’s favor. The company says it believes that “consumer credit reports are predominately accurate and serving lenders and consumers well.” But folks should check their credit reports on a regular basis to make sure that no errors have been made.
Source: Insurance Journal
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