- Half of Americans worried about second Cold War: poll
- Kermit Gosnell clinic aide who heard aborted baby scream gets 5 to 10 years in prison
- Iraq mulls law to let men marry 8-year-old girls
- Russia sends bombers on 24-hour Arctic patrol
- Sam Adams beer brewer nixes St. Patrick’s parade that won’t allow gays
- Houston dad kills boy, 17, in daughter’s room in mistaken ID tragedy
- Rep. David Jolly ready to work with Democrats on compromise
- Joe Biden: I can’t be president — my golf would suffer
- German authorities grab suspected hardline Islamist
- Rare lesbian HIV transmission case turns up in Texas
FTC finds errors in 1 of 5 personal credit reports
Your credit score might be better than you think.
In the first comprehensive study of its kind, the Federal Trade Commission reported Monday that some 40 million Americans could be suffering from errors that are keeping their credit scores lower — and their borrowing rates higher — than they should be.
The FTC study found that 1 in 5 American consumers had at least one error on their credit report from one of the three leading services — Experian Information Solutions Inc., Equifax Inc., and TransUnion — and 5 percent had an error so significant that they could end up paying more for mortgages and auto loans because of these mistakes.
The report sheds a light on growing concerns about the accuracy of credit scores.
“This confirms many other studies that have shown credit-reporting data are inaccurate for the vast majority of consumers,” said Ric Edelman, chairman and CEO of Edelman Financial Services in Fairfax.
He pointed to a 2004 study from the National Association of Public Interest Research Groups that found 79 percent of all credit files have mistakes, and 1in 4 credit reports has errors that could cause someone to be denied credit.
Greg McBride, senior financial analyst at Bankrate.com, said the FTC report shows that consumers should be more diligent in checking their credit scores. “Your best defense is a good offense,” he said.
To protect against this, the FTC is also warning consumers to check their credit reports at least once a year, and dispute any inaccuracies they find.
“These are eye-opening numbers for American consumers,” Howard Shelanski, director of the Bureau of Economics at the FTC, said in a statement. “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.”
But credit reporting agencies disputed the accuracy of the FTC report.
“Repeated studies have shown that despite the fact that billions of individual pieces of data are received and processed each year, the credit reports assembled provide highly accurate assessments of consumer history that both businesses and consumers can use to make informed financial decisions,” the Consumer Data Industry Association said in a statement to CBS’ “60 Minutes,” which aired a segment on the questions surrounding the industry Sunday.
“Credit reporting agencies have a simple goal: We want to provide the most accurate data possible,” the CDIA added.
Traditionally, the credit reporting agencies have placed much of the blame for faulty data on creditors and identity thieves. The rating services maintain that they are only reporting the numbers that creditors give them.
Mr. Edelman said there should still be penalties for these mistakes.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
- Dysfunction, disarray at Homeland Security management cited in IG's report
- GM's Barra to be first woman to run top American carmaker
- Treasury sells last shares in 'Government Motors'
- U.S. businesses reach out quickly to partners in Iran
- General Motors ending Chevrolet sales in Europe to focus on Opel and Vauxhall
Latest Blog Entries
TWT Video Picks
By Bob Dole
The industrious island has proved itself worthy of U.S. inclusion
- EXCLUSIVE: FBI blocked in corruption probe involving Sens. Reid, Lee
- Sam Adams beer brewer nixes St. Patrick's parade that won't allow gays
- College group's diversity event canceled after excluding white people
- F-35 secrets now showing up in Chinas stealth fighter
- Deportations come mostly from border, DHS chief says
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- USS Kidd sent to Indian Ocean after 'indication' of Malaysian jet crash
- EDITORIAL: Lois Lerner's dilemma
- BRUCE: The power of bossy
Chaos as Manhattan building explodes
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014