February 11, 2013
WASHINGTON, DC – A study released today by the Federal Trade Commission (FTC) shows that many consumers could be paying more for their credit – from student loans, to mortgages and interest rates – than they need to. The FTC found that over 40 million Americans had an error on at least one of their three credit reports, emphasizing the need for consumers to check their credit reports for mistakes that can cost them.
“It is highly concerning that so many consumers across the country are carrying mistakes on their credit reports that can cost them every day,” said Pamela Banks, senior policy counsel for Consumers Union, the policy and advocacy division of Consumer Reports. “Consumers shouldn’t be denied a loan or pay higher interest fees because of a reporting mistake – especially when these errors can be identified and corrected through your free credit report. It’s critical that consumers know how to access their annual free credit report and take advantage of it before their credit is damaged.”
The study also found that one in four consumers identified errors on their credit reports that might affect their credit scores.
“This underscores the need for consumers to have access to a free, reliable credit score in addition to their credit report. Consumers should have the same information that lenders have when making decisions about their credit,” said Banks.
Consumers Union has launched a national “Know Your Score” campaign urging lawmakers to require the three major credit reporting agencies to give you credible and trustworthy credit scores free along with your credit reports. While consumers can currently pay to get their score, a previous report by the Consumer Financial Protection Bureau (CFPB) found that one in five consumers would be likely to receive a meaningfully different score from the one sent to a lender.
In addition, the consumer group has also called for fixes to the credit reporting system. Consumers Union has urged the CFPB to audit the big credit reporting agencies to ensure their compliance with existing requirement to maintain accurate consumer credit files and require them to investigate and fix errors reported by consumers.
For more information on free credit reports and scores, visit www.defendyourdollars.org.