Following the big “60 Minutes” piece, even the New York Times is jumping on the bandwagon. Check out NYT’s op-ed piece on credit report inaccuracies:
Victimized by Credit Reports
Published: February 12, 2013
The companies that compile and sell credit reports on 200 million Americans have often dismissed allegations of widespread errors in the reports. But a long-awaited study issued this week by the Federal Trade Commission shows that the problem is quite real — with one in five consumers having confirmed errors in their reports.
Given the evidence, it is imperative that the federal government do more to make the credit-reporting process transparent and to protect consumers from errors that can drive up their borrowing costs and cause them to be denied jobs or be turned away by landlords.
The F.T.C. report, which was required by Congress, is the first major study that examines all of the main components of the consumer credit reporting and scoring system. It is based on work with 1,001 consumers who reviewed a total of nearly 3,000 credit reports with the help of a research associate who helped them identify errors and seek corrections from the credit-reporting companies.
It turned out that 21 percent of the participants found an error in one or more of their credit reports that was later corrected by a credit agency. For more than 5 percent, the errors were serious enough to reduce the credit score, making it more likely that they would have to pay more for things like automobile loans, insurance or mortgages. If the same ratio is true for the general population, as many as 10 million consumers could be living with undeserved financial penalties.
The study’s participants were fortunate to be given help to resolve the mistakes. For some consumers, however, straightening out a bad report is no easy task. Some of those who have had their financial lives ruined by egregious errors try for years to have the mistakes corrected only to have the problems persist. One major reason is that credit-reporting agencies, as well as the creditors and others who furnish them with data, often fail to investigate consumer complaints, allowing errors to live on and on.
The F.T.C. recommends that people check their credit reports regularly, which is a good idea. But that is not nearly enough. Congress could help consumers in other ways. It could require all credit or background check agencies to register with the federal government and to adhere to strict accuracy standards. It could give consumers the right to view all credit information that agencies collect about them.
Finally, it could strengthen an existing law that requires that consumers receive notice when they are denied jobs, credit or are in any way disadvantaged by unfavorable credit report information. Sometimes such notices are never sent; Congress should give the consumers the right to sue when this happens.