U.S. PIRG: Credit Reports Inaccurate, Credit Bureaus Tolerate Mistakes

WASHINGTON – Credit reports are not only rampant with serious errors, but exacerbating the situation is the fact that “the big credit bureaus and big business tolerate big mistakes in credit reports.” The big credit bureaus U.S. Public Information Research Group Consumer Program Director Ed Mierzwinski was referring to are the three national credit bureaus – Equifax, Experian, and Trans Union – and his statement was based on his assessment of the results of a study released last month by U.S. PIRG that show one in four credit reports “contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan, or even a job.” Mierzwinski referred to credit reports as “a consumer’s financial resume.” Over the past several years, the state PIRGs and other consumer organizations have published numerous reports that show “sloppy” credit bureau practices are responsible for errors in consumer credit reports. “It is outrageous that inaccurate credit reports could damage 1 in 4 consumer’s ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job,” said Mierzwinski. The three major credit bureaus maintain files on nearly 90% of American adults. U.S. PIRG collected 200 surveys from adults in 30 states who reviewed their credit reports for accuracy. Among the key findings: * 25% of the credit reports contained errors serious enough to result in the denial of credit; * 79% of the credit reports contained mistakes of some kind; * 22% of the credit reports listed the same mortgage or loan twice; * almost 8% of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that demonstrate the creditworthiness of the consumer; * 54% of the credit reports had personal demographic identifying information that was misspelled, long outdated, belonged to a stranger, or was otherwise incorrect; * 30% of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open. “In the last five years the Federal Trade Commission has fined the Big Three credit bureaus millions of dollars for not helping consumers clean up inaccurate reports, yet recently allowed the credit bureaus to roll out the new right to a free credit report at a snail’s pace,” said Mierzwinski referring to the rule finalized by the FTC on June 4 that implements the new consumer right to a free credit report and rolls it out over a nine-month period. U.S. PIRG recommends consumers examine all three credit reports at least once each year before they apply for credit. In its report entitled, “Mistakes Do Happen: A Look at Errors in Consumer Credit Reports,” June 2004, the National Association of State PIRGs noted that the credit bureaus aren’t the only ones responsible for errors in consumers’ credit reports – creditors and other furnishers often make mistakes too, they stated. Worse, NASP stated in the report, “some of the `errors’ are intentional, where a creditor seeks to deflate its own consumer’s credit scores to maintain its current customers as captive customers.” NASP urged federal policymakers to strengthen a consumer’s private right of action to seek redress through the courts when a credit bureau or a creditor fails to protect personal information or comply with an investigation; limit or prohibit the use of a consumer’s Social Security number for transactions, credit applications, or on driver’s licenses and other identifications; give consumers more control over who has access to their credit report; give identity theft victims more power to clear their names. -