- More than a third of Americans have at least one error on their credit report.
- Credit reports determine interest rates for loans and whether or not you can get a certain credit card.
- Major credit report companies reject these findings.
More than a third of Americans reported finding at least one error on their credit report, according to Consumer Reports. Errors ranged from inaccurate personal information to misreported late payments and debts.
Inaccurate information on credit reports can pose problems for many, since credit reports determine eligibility and pricing for many things, including renting and buying homes, pricing for loans and credit cards, and even employment decisions.
Mistakes include wrong addresses and late payments
Credit-report errors have more than doubled since 2019, according to the report, which cites complaints to the Consumer Financial Protection Bureau.
Consumer Reports investigated the errors by asking 5,858 participants for a copy of their credit report between Feb. 1, 2021, and April 1, 2021. Mistakes seemed to pop up in sections that people weren’t previously aware of. Twenty-nine percent of respondents spotted errors related to their personal information, with more than half of the errors pertaining to incorrect address information. This is worrisome, since incorrect address information can bring down an avalanche of troubles for consumers, especially when it involves employment or screenings for apartments and homes.
People also saw accounts they didn’t recognize (41%). Others said they discovered debt reported to collections that they weren’t aware of, in addition to misreported late payments and missed payments they may have made.
That’s just the data for people who gained access to their credit reports — 10% of respondents said it was difficult or very difficult to find their credit reports. Participants ran into a slew of issues, like being locked out from their accounts after failing to answer identity verification questions and then having to verify their identity through the mail, a process that can take weeks, if not months.
Others reported having “mixed files,” which is when information from someone with a similar name or social security number appears in the wrong report.
“Mistakes in credit reports are more than just a frustrating hassle for consumers,” said Syed Ejaz, policy analyst for Consumer Reports. “Credit report errors can lower your credit score and lead to higher interest rates on loans or even prevent you from getting a job or an apartment. It’s time to hold the credit bureaus accountable for making sure credit reports are fair and accurate and to give consumers free access to their reports and scores at all times. No one should ever have to pay to access their own credit information.”
Credit report companies say the report is false and misleading
If you’ve noticed a typo on your address or want to dispute debt collection, it should be easy to rectify. But it’s not. Consumer Reports is asking credit bureaus and policymakers to make much-needed changes. Specifically, they call out Equifax, Experian, and TransUnion, which they said should redesign their identify-verification system immediately.
The Consumer Data Industry Association, which represents the trio of credit reporting companies, called the findings of the report “false and misleading.”
“Accuracy is the bedrock of the credit reporting industry, and getting credit reports right for consumers is our most important job,” Francis Creighton, president and CEO of the Consumer Data Industry Association, said in a statement. “That is reflected by our industry’s 98% accuracy rate, and while there is always room for improvement, using unempirical data and slanted storylines to paint a picture of an inaccurate credit reporting ecosystem is simply a disservice to consumers and inaccurate reporting.”
The Federal Trade Commission says that both the credit bureau and the business that supplied the information to a credit bureau must correct mistakes in your report for free. They suggest contacting the credit bureau immediately to report the inaccurate information.
How to get a free credit report
The three major credit bureaus — Equifax, Experian and TransUnion — can all be accessed through AnnualCreditReport.com. Thanks to federal laws, the credit reports are free and can be accessed every 12 months from each credit reporting company.
If you’re interested in a free credit report, you can order it online or call 1-877-322-8228. Applicants will need to provide their name, address, social security number, and date of birth.