Study: Credit Report Errors Common, Damaging

One in four credit reports contain serious errors that could lead creditors to believe that a consumer is over-extended or delinquent on loans, according to a new study.

The study, conducted by the Public Interest Research Group (PIRG), defined "serious" errors as ones that could result in an automatic denial of credit, CNN/Money reported.

"It is outrageous that inaccurate credit reports could damage one in four consumer's ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job," Ed Mierzwinski, director of consumer programs at consumer group PIRG, said in a statement.

Some key findings:

  • Personal information was misspelled, outdated or belonged to someone else in 54 percent of the credit reports sampled.

  • Credit accounts that had been closed were still listed as open on 30 percent of the reports sampled.

  • The same mortgage or loan was listed twice on 22 percent of the reports.

  • Errors of some kind were found on 79 percent of the reports.

Errors could show that a consumer was carrying too much debt, or that an account was in collection or that a loan was delinquent.

Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association, said that credit decisions are not based on one negative claim, but the overall picture. Under federal law, credit reporting errors must be corrected within 30 days.

"I don't think there ought to be an error in any credit, but we update credit files 4.5 billion times a month," Magnuson told CNN/Money. "When there is an error, it is our obligation to correct it, which in 80 percent of the cases is done in 10 working days."

The three major credit bureaus are Equifax, Experian and TransUnion, which keep files on almost 90 percent of all adults in the U.S. PIRG recommends checking credit reports at least once a year. Consumers can get one free report a year under the Fair and Accurate Credit Transactions Act, passed last year.

PIRG's report is based on 197 surveys received from 154 adults in 30 states. PIRG collected 73 surveys from Equifax, 60 from Experian, and 40 from TransUnion. Five of the responses did not indicate the credit bureau and 19 indicated the respondent ordered a report from all three bureaus.

You may like these other stories...

Majority of House of Representatives urges leadership to preserve cash method of accounting for tax purposesA bipartisan majority of the House of Representatives – 233 members – has signed a letter urging House...
Munger defends Buffett’s dealCharles Munger defended recent decisions by his business partner, Berkshire Hathaway Inc. Chairman Warren Buffett, and predicted that Berkshire would grow robustly, Jason Zweig of the Wall...
Tax friendly trusts swell under new rulesUS companies are latching onto an obscure real estate provision to avoid corporate taxes, widely adopting a financial maneuver that has been expanded under the Obama administration,...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.