FTC Study Shows Five Percent of Consumers Pay More for Goods & Services Due to Errors on Credit Reports
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A recent congressionally-mandated study of the U.S. credit reporting industry, by the Federal Trade Commission (FTC), found that five percent of consumers had errors on one of their three major credit reports. The results make it clear that consumers should check their reports regularly before the mistakes result in greater out-of-pocket costs for essentials such as auto loans and insurance coverage.
The study, in which participants were encouraged to use the Fair Credit Reporting Act (FCRA) process to resolve any potential credit report errors, also found that:
- One in four consumers identified errors on their credit reports that might affect their credit scores;
- One in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports;
- Four out of five consumers who filed disputes experienced some modification to their credit report;
- Slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report; and
- Approximately one in 20 consumers had a maximum score change of more than 25 points and only one in 250 consumers had a maximum score change of more than 100 points.
If after realizing you have an error on your credit report, have brought it to the attention of each credit reporting agency through their specified protocol but still do not have a satisfactory outcome, contact a consumer advocacy firm that specializes in handling credit disputes.