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Erroneous Credit Reports: Are You a Victim?

Written by Gary North on February 12, 2013

The Federal Trade Commission has issued a report on credit reports. About 20% of them are inaccurate.

The FTC did not have to conduct a study. Anyone with a statistical background knew that 20% are erroneous. It’s Pareto’s law. About 20% of the worst examples of anything provide 80% of the problems.

What if your FICO score is too low? It can keep you from getting a low-interest mortgage. It can keep your credit card rate high.

If your FICO score is 800 or higher, you are in good shape. The median score — half above, half below — is 723.

How can you find out? Once a year, you can request a free credit report from the three rating services.

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4 thoughts on “Erroneous Credit Reports: Are You a Victim?

  1. I saw the report about this on 60 Minutes this past Sunday. What really upset me is that the credit bureaus only pay, at best, lip service to fixing glaring errors and that they really don't care about doing their job well. I would imagine the video is up at 60 Minutes now, and it's worth watching. That is unacceptable and needs to be changed. I also think that credit reports are over-used and part of the problem is coming from their use for almost everything.

    If we did need any laws, laws restricting the use of credit reports and absolute mandates for fixing errors found and very painful penalties for the credit bureaus for failing to act need to be put in place. The three big bureaus have thumbed their noses at the FCRA. Time to give it some real teeth and to really protect the consumer.

  2. They must have cleaned up their act some. Thirty years ago I was denied a credit card because some where some one had typed a wrong social security number so my credit report showed I had an alias. We both had good credit but banks shun aliases. At the time congress was trying to deal with the problems of credit reporting agencies. I sought the help of my congressmen to correct my report and those agencies lied to the congressmen. Because the social security number caused the problem I checked with SS to see if there was any problems there. I was told that unless one of us was fraudulently drawing benefits they wouldn't even investigate. At that time 50 % of credit reports contained errors. I never did get it corrected but just went to a small bank where they knew me for my credit needs. Any creditor that relies on those reports deserves what they get.
    Oh yeah, it took about 15 minutes to learn all about the other guy for free but I couldn't see my own report without paying for it.

  3. Not only will the credit reporting services not correct their errors on your credit report, you get denied jobs because of their mistakes! Employers look at your credit score first, and if bad, look no further at your job history and qualifications!!!…

  4. You can sue the three agencies (and the creditors and debt collectors that put the erroneous information in your credit report) under the Federal Fair Credit Reporting Act. For instance, under the act if you write the 3 agencies and put them on notice there is an error in your report, they are supposed to mark that item "in dispute" and investigate its accuracy. While the item is in dispute, by law it cannot be used to negatively affect your credit score. It can't even be considered by potential employers or lenders looking at your application, by law.

    If the agencies don't comply, it's $1000 penalty per agency per month that they ignore your dispute. That's just one provision of the FFCRA that can be used when these b*st*rds screw with your credit score and by extension your reputation. But they also know the majority of people haven't the foggiest idea that these consumer protections exist.