According to a study conducted by the National Association of State PIRGs, mistakes happen on credit reports. That’s unfortunate, but true. Our credit reports reflect our financial responsibility. When there are errors on credit reports, an inaccurate picture is presented to potential lenders and employers. The result may be denial of a loan, or increased costs of borrowing. You may get turned down for job. You may not qualify for insurance. Your credit reports need to be accurate to ensure that the picture presented is the true picture of your financial responsibility.
The three major credit bureaus maintain credit profiles or more than 90 million consumers. Those files are routinely sold to lenders, employers, landlords and other parties interested in understanding your financial responsibility before doing business with you. Sloppy practices by the bureaus are the primary cause of credit report errors. Additional errors are caused by identity theft, but inadequate practices by the bureaus result in difficult and frustrating procedures to resolve identity theft errors.
According to the study, 25% of credit reports have errors significant enough to result in the denial of credit. Additionally, 54% included errors about personal information such as demographic information. More than 22% of credit reports listed duplicate information. Almost 8% were missing major mortgage or loan information that supported the credit worthiness of the consumer.
Despite recent attempt by the bureaus to correct sloppy practices, errors still exist. To help reduce the negative of errors on your credit reports, you should order your free copy every year. Review your reports carefully for errors. Even what appears to be minor discrepancies may result in significant credit score variations.