Mistakes Happen

The Consumer Federation of America initially reviewed 1,704 credit files representing consumers from 22 states and subsequently re-examined a sample of 51 three-agency merged files. In this sample of merged files, the study found wide variation in the information maintained by the CRAs, and that errors of omission were common in credit reports. For example, the report stated that about:*

• 78 percent of credit files omitted a revolving account in good standing;
• 33 percent of credit files were missing a mortgage account that had never been late;
• 67 percent of credit files omitted other types of installment accounts that had never been late;
• 82 percent of the credit files had inconsistencies regarding the balance on revolving accounts or collections; and
• 96 percent of the credit files had inconsistencies regarding an account’s credit limit.

A March 1998 U.S. Public Interest Research Group (U.S. PIRG) study found similar frequencies of errors in 133 credit files representing 88 individual consumers.** U.S. PIRG reported that 70 percent of the files reviewed contained some form of error. The errors ranged in severity from those unlikely to have negative repercussions to those likely to cause a denial of credit. For example, the report found:

• 41 percent of the credit files contained personal identifying information that was long-outdated, belonged to someone else, was misspelled, or was otherwise incorrect;
• 29 percent of the credit files contained an error—accounts incorrectly marked as delinquent, credit accounts that belonged to someone else, or public records or judgments that belonged to someone else—that U.S. PIRG stated could possibly result in a denial of credit; and
• 20 percent of the credit files were missing a major credit card account, loan, mortgage, or other account that demonstrated the creditworthiness of the consumer.

Similar to the U.S. PIRG study, a 2000 survey conducted by Consumers Union and published by Consumer Reports asked 25 Consumers Union staffers and their family members to apply for their credit reports and then review them.*** In all, Consumers Union staff and family members received and evaluated 63 credit reports and in more than half of the reports, they found inaccuracies that they reported as having the potential to derail a loan or deflect an offer for the lowest-interest credit card. The inaccuracies identified were similar to those reported by the Consumer Federation of America and U.S. PIRG—inclusion of information belonging to other consumers, inappropriately attributed debts, inaccurate demographic information, and inconsistencies between the credit reports provided by the three major CRAs regarding the same consumer.

*Consumer Federation of America and National Credit Reporting Association, Credit Score Accuracy and Implications for Consumers, December 2002.

**U.S. PIRG, Mistakes Do Happen: Credit Report Errors Mean Consumers Lose, March
1998.

***“Credit Reports: How Do Potential Lenders See You?” ConsumerReports.org, July 2000.