How Common are Credit Report Errors?

Just how many credit report errors exist? And how many of them are serious enough to have an impact on consumers’ credit scores?

It’s an excellent question and one that has not yet been answered adequately. Perhaps the most widely quoted survey on this topic was one conducted in 2004 by U.S Public Research Interest Group, which surveyed just 200 consumers and found that 80% of reports contained some kind of mistake, while 25% contained “serious” errors. While the credit reporting industry has widely disputed that study, to my knowledge, no other surveys have been released to refute those findings.

In order to get at an answer to the question of credit report accuracy, Congress directed the FTC to conduct a study of credit report accuracy. The study began in 2004 and continues through 2012, with a final report to be issued in 2014. Interim reports are due every two years. The 2010 interim report was issued on January 12, 2011.

The study works like this:

• Invitations have been sent by mail to a large number of consumers, with the goal of getting 1000 consumers to participate. The FTC is sending more invitations to consumers with below-average credit scores in an attempt to make sure those consumers are adequately represented in the study.
• Consumers review their reports with the help of experts, and get their initial FICO scores. Possible mistakes are identified and the reports are sent to FICO for rescoring to determine how those mistakes may impact the consumer’s credit scores (first rescoring).
• Consumers dispute mistakes with the CRAs.
• If the reports are corrected, the corrected files are sent to FICO for a second rescoring.

It sounds like a much needed study. The results should be meaningful, given that the reports will be rescored after mistakes have been disputed to help determine the impact of those mistakes on credit scores. As the FTC describes it, “The study will reveal the main types of confirmed material errors, their relative frequencies, and impact of such errors on a consumer’s credit standing.”

If you have credit report errors, do not hesitate to contact the Credit Care Company. We can help you resolve your credit report errors and ultimately help raise your credit score. Give us a call today at 314-485-9940.