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The shocking truth behind inaccurate credit reports

By Ruth Racey
Published: Monday, November 9th, 2009

According to a federal law called the Fair Credit Reporting Act, consumers have the right to complain for erroneous and inaccurate information in their credit reports. Thus, if there is anything wrong or inaccurate in your credit report, you should let the credit bureaus know. Common errors include information about accounts which do not belong to you, closed accounts that are shown as open accounts, or negative statements, such as liens or bankruptcies, from another consumer having a similar name or social security number. The credit bureaus can investigate your claim in 30 days, then they should remove any information proved inaccurate or which can no longer be checked. 

A number of consumer groups in the United States say that most credit reports are filled with inaccuracies. The National Credit Reporting Association (NCRA) as well as the Consumer Federation of America (CFA) conducted a significant study that shows that millions of Americans are in danger of being rejected in their credit application because they have credit report mistakes. The NCRA and the CFA examined the credit scores and reports of an estimated 500,000 consumers nationwide, and their conclusions were very alarming. 

  1. 70% of 200 million American credit files are feared to contain inaccuracies.
  2. 78% of credit records were missing a good standing account.
  3. 33% of files were missing promptly-paid mortgages.
  4. Some mistakes may result in a FICO score of 620 points, which means the consumer would pay almost a 100% increase in a 30-year mortgage.
  5. 43% of files do not match other credit bureaus’ records concerning the number of times a customer paid 30 days late.

Most of the errors in credit reports have to do with data inaccuracies, either the information about you is incomplete, not updated, or is actually meant for someone else. These often happen because of human error. For example, you accidentally gave someone the wrong social security number, or maybe your administrative assistant read your number incorrectly, or a staff typed it wrong while encoding your number. There are also other cases where a single consumer used different names (such as William and Bill Gates) or a John Jones Sr. is mistaken for a John Jones Jr. 

No matter how it occurs, mistakes can cause you a lot of money especially that they are in your credit report. With this inaccurate information, you may also be in danger of being denied of some services – like cell phone service or utilities – as well as more essential things, like securing a job or applying for insurance.

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