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, the Federal Trade Commission said in a report released on Monday.
Experian, Equifax and TransUnion are the leading consumer credit reporting agencies, and the FTC has encouraged people to check the three reports annually in order to catch mistakes.
Some 26 percent of consumers found a mistake in one of their three credit reports and 21 percent requested and got their report changed, the FTC said in a 370-page report written at the request of Congress and released on Monday.
For about five percent 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.
The data drove home the need for consumers to keep tabs on their credit history, said Howard Shelanski, director of the FTC’s Bureau of Economics.
“These are eye-opening numbers for American consumers,” said Shelanski in a statement. “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly.”
In response, Experian argued that while there were mistakes in the reports, in most cases they did not change credit scores enough to matter, and that in a small percentage of cases a mistake would accidentally raise a credit score in the recipient’s favor.
“After thoroughly reviewing the FTC report issued today, we believe it confirms that consumer credit reports are predominately accurate and serving lenders and consumers well,” the company said in an emailed statement. “That said, Experian is not satisfied with this result and we continue to work toward ensuring credit reports are 100 percent accurate.”
Equifax argued that other studies had found lower error rates than the FTC in the credit reports, and said that they resolved three out of four disputes within two weeks.
“Our goal is perfection,” the company said in an emailed statement. “For that to happen, all parties – data furnishers, consumers, government agencies and the CRA’s (credit reporting agencies) – have a responsibility and need to work together.”
TransUnion, in a statement, also urged consumers to double check their credit reports and dispute any errors.
A total of 1,001 people participated in the study and they viewed 2,968 credit reports, just under three per consumer.