San Diego, CA. The National Association of Public Interest Research Groups (PIRGs) released an update on credit file mistakes which says overall one in four credit reports contain errors serious enough to bring about a denial in credit. 79 percent of all credit files reviewed, contain mistakes, many of which are not significant enough to sidetrack a credit application, but are typos, incorrect dates and other data entry errors.
Credit report reviews conducted by professionals, trained by the award winning, nonprofit Institute of Consumer Financial Education (ICFE) in San Diego, CA., helps consumers discover any problems, including suspicious activity, prior to their making a mortgage or credit applications and avoid a considerable loss of time and embarrassment which accompanies a declined answer to many requests for credit from consumers whose files contained inaccuracies.
PIRG says its report is based on files held by the so-called Big Three credit bureaus, which are also referred to as the national repositories. There are numerous other local credit bureaus. These either sell their data to or license their data to these national repositories. When a consumer credit decision is made in the United States, even if the creditor initially contacts a local bureau, information from one or more of the repositories is generally used.
There are also numerous specialty credit bureaus, some affiliated with the repositories, others affiliated with other companies. For example, the Medical Information Bureau collects information about insurance claims history. Tenant screening bureaus work on behalf of landlords. CLUE, a division of the Equifax spin-off Choicepoint, is an auto and home insurance rating bureau. Numerous check verification and guarantee bureaus also exist. One distinction is that many of the specialty bureaus only collect and sell negative information, while the national repositories report on both positive and negative payment history, said the executive summary.
All are regulated under the federal Fair Credit Reporting Act, 15 USC 1681 et seq. The act uses the terms consumer reporting agencies and consumer reports instead of the more common credit bureaus and credit reports, according to the PIRG report s executive summary.
Executive Summary of the PIRG Report:
The most valuable thing we have is our good name. The most common reflection of our reputation as a trustworthy consumer is our credit report. Unfortunately, the information contained in our credit reports, which are bought and sold daily to nearly anyone who requests and pays for them, does not always tell a true story.
Credit bureaus collect and compile information about consumer creditworthiness from banks and other creditors and from public record sources such as lawsuits, bankruptcy filings, tax liens and legal judgments. The three major credit bureaus Experian, Equifax, and Trans Union maintain files on nearly 90 percent of all American adults. Those files are routinely sold to credit grantors, landlords, employers, insurance companies, and many others interested in the credit record of a consumer, often without the consumer's knowledge or permission.
Several studies since the early 1990s have documented sloppy credit bureau practices that lead to mistakes on credit reports for which consumers pay the price. Consumers with serious errors in their credit reports can be denied credit, home loans, apartment rentals, auto insurance, or even medical coverage and the right to open a bank account or use a debit card. Consumers with serious errors in their reports who do obtain credit or a loan may have to pay higher interest rates because the mistakes falsely place them in the sub-prime, high-cost lending pool.
We asked adults in 30 states to order their credit reports and complete a survey on the reports accuracy. Key findings include:
- Twenty-five percent (25%) of the credit reports surveyed contained serious errors that could result in the denial of credit, such as false delinquencies or accounts that did not belong to the consumer;
- Fifty-four percent (54%) of the credit reports contained personal demographic information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;
- Twenty-two percent (22%) of the credit reports listed the same mortgage or loan twice;
- Almost eight percent (8%) of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that demonstrate the creditworthiness of the consumer;
- Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but remained listed as open;
- Altogether, 79% of the credit reports surveyed contained either serious errors or other mistakes of some kind.
Professional credit report reviews, conducted by a qualified and trained professionals known as Certified Credit Report Reviewers help consumers avoid credit problems before they make application for credit or a mortgage. Credit report reviews used to be something that was done when a consumer discovered a mistake or activity resembling identity theft, after they were denied credit.
Soon, when the nations consumers begin accessing their free credit reports under the new FACTA law, the credit report reviews will become essential because millions of consumers may begin access their free credit reports, however, they may not be able to read the report or understand the symbols and summaries.
A professionally trained credit report reviewer can identify inaccuracies, omissions, and also point out suspicious activity, in addition to pointing out items in a report that may negatively affect a credit score.
To learn more about free credit reports, credit file mistakes and credit report reviews or how to become Certified as a Credit Report Reviewer, please visit www.icfe.info.
Paul Richard, RFC Executive Director Institute of Consumer Financial Education PO Box 34070 San Diego, CA 92163
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