A recent FTC study of the credit reporting industry revealed that five percent of consumer credit reports contained errors that could result in higher rates for consumer loans and insurance.
“These are eye-opening numbers for American consumers,” Howard Shelanski, the director of the FTC’s Bureau of Economics, said. “The results of this first-of-its kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”
The study also found that one in four consumers found errors in their credit reports that could affect their scores, and approximately 20 percent of consumers had a report error that was corrected after it was disputed with the reporting agency. Eighty percent of consumers who filed disputes saw some changes to their credit report, while slightly more than 10 percent of consumers saw a change in their credit score after the agency fixed the errors. Nearly one in 20 consumers saw a maximum score change of more than 25 points, and only one in 250 consumers saw a maximum score change of more than 100 points.
“Your credit report has information about your finances and your bill-paying history, so it’s important to make sure it’s accurate,” Charles Harwood, the acting director of the FTC’s Bureau of Consumer Protection, said. “The good news for consumers is that credit reports are free through annualcreditreport.com, and if you find an error, you can work with the credit reporting company to fix it.”