The FTC recently released figures, based on a years-long, wide-spread study of consumer credit reporting and scoring, that are a wake-up call for American consumers. The study revealed that one in four Americans had errors on their credit reports. About one in ten consumers saw an increase in their credit scores after consumer reporting agencies (CRAs) fixed the errors. About one in twenty consumers had errors severe enough to cause them to pay more for auto loans, insurance, and other credit products.
(Learn more about credit reports and credit scores.)
The FTC Credit Reporting Study
The FTC study began in 2004 with the final report due in 2014. Along the way, the FTC has been reporting results every two years. The study is a first in its magnitude – it includes information from consumers, consumer reporting agencies, lenders, creditors, debt collectors, and the courts. (Read a full report of the FTC study.)
Disputing Errors Can Help
The study also tracked consumer efforts to dispute errors on their reports, and the CRA responses. One in five consumers had an error that was corrected by a CRA. Four out of five consumers who filed disputes had some type of change made to their reports.
One in ten consumers had their score increase after errors were fixed. And one in 20 say and increased score of more than 25 points.
Check Your Credit Report Regularly
According to Howard Shelanski, Director of the FTC’s Bureau of Economics, the study results were, “…eye-opening numbers for American consumers,” and made it clear that “consumers should check their reports regularly.”
To learn how to review your credit report and dispute errors, visit Nolo’s Cleaning Up Your Credit Report topic area.