A report released today by the Federal Trade Commission underscores the need for Americans to check their credit reports on a regular basis.
The FTC study found that 26 percent of consumers had a material error on at least one of their three credit reports. Of greater alarm was the fact that 5 percent of the consumers in the study had an error that, when corrected, placed them in a different credit risk tier and could result in paying a lower interest rate on their loans.
This was an eight-year study by the FTC which involved 1,001 consumers and reviewed 2,968 credit reports.
“These are eye-opening numbers for American consumers,” said Howard Shelanski, director of the FTC’s Bureau of Economics. “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”
The report showed that consumers can get these errors reversed: four in five who filed disputes saw a change in their credit report.
Consumers can receive one free credit report from each of the three credit reporting agencies–Experian, TransUnion and Equifax–every year at AnnualCreditReport.com.
But a recent study by the Consumer Financial Protection Bureau found that only less than 20 percent of consumers check their credit report each year.
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