WASHINGTON – One in four credit reports contains errors serious enough to disqualify consumers from buying a home, opening a bank account or getting a job – and an overwhelming majority contain mistakes of some kind, according to a survey released Thursday by a consumer group.
Serious errors found in credit profiles maintained on some 90 percent of American adults include consumer accounts incorrectly listed as delinquent or in collection or that actually belong to another person, said the Public Interest Research Group report.
Of the 197 credit reports collected from people in 30 states, 79 percent had some sort of error, while 54 percent included personal identifying information that was misspelled, outdated, belonged to someone else or was otherwise incorrect. Thirty percent contained credit accounts that consumers had closed but that remained listed as open. Nearly 8 percent were missing major credit, loan or mortgage accounts that indicate creditworthiness, the group said.
“The big credit bureaus and big business tolerate big mistakes in credit reports,” said Ed Mierzwinski, the group’s consumer program director. “But those mistakes ruin the financial reputations of hard-working Americans.”
The three largest credit-reporting agencies – Equifax, Experian and Trans Union – collect information from banks, mortgage companies and other creditors and from public records related to lawsuits, bankruptcy filings and tax liens. They sell the consumer reports to credit grantors, landlords, employers, insurance companies and utilities, which increasingly use them to help determine the likelihood that a person will pay obligations.
Spokesmen for Experian and Trans Union didn’t immediately return telephone calls seeking comment on the survey. Equifax spokesmen couldn’t immediately be reached.
The Public Interest Research Group and other groups advise consumers to examine their reports from all three credit bureaus at least once a year before applying for new credit. The reports are available without charge in several states, and will be provided free nationwide by late next year.
Previous studies by consumer groups also have shown frequent errors and omissions in credit reports. Besides being denied new credit, a consumer with an inaccurate report can unfairly be charged high interest rates as a potentially risky borrower.
In January 2000, Equifax, Experian and Trans Union paid a total of $2.5 million to settle Federal Trade Commission allegations that they blocked calls from more than a million consumers who wanted to discuss their credit reports. Many people also were kept on hold for unreasonable amounts of time, the federal agency said.
Last July, Equifax agreed to pay $250,000 to resolve the FTC’s allegations that it didn’t do enough in 2001 to answer calls from consumers inquiring about their credit reports.
On the Net
The Public Interest Research Group report is available at www.uspirg.org.
Equifax Credit Information Services Inc.: www.equifax.com
Experian Inc.: www.experian.com.
Trans Union LLC: www.transunion.com.
On the Net:
The report is available on PIRG’s Web site at http://www.uspirg.org
Equifax Credit Information Services Inc.: http://www.equifax.com/
Experian Inc.: http://www.experian.com
Trans Union LLC: http://www.transunion.com
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