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, according to a survey released last week by U.S. PIRG, the national lobbying office for state Public Interest Research Groups.
In the past decade, state PIRGs and other consumer organizations have issued numerous reports showing that sloppy credit bureau practices are at fault for errors in consumer credit reports. U.S. PIRG collected 200 surveys from adults in 30 states who reviewed their credit reports for accuracy. The people who provided information for the survey were PIRG members or employees.
“From a methodology standpoint, not to mention a bias standpoint, this is suspect,” said Norm Magnuson of the Consumer Data Industry Association, which represents the credit-reporting industry. Also, PIRG “is unilaterally defining what is a serious error. The only entities that would know whether something is in fact an error, and/or whether it would deny credit, is a lender.”
The three largest credit-reporting agencies are Equifax, Experian and Trans Union. They collect information from banks, mortgage companies and other creditors and from public records related to lawsuits, bankruptcy filings and tax liens and sell the reports to credit grantors as well as landlords, employers, insurance companies, utilities and others.
Key findings from the survey include:
· 25 percent contained errors serious enough to result in the denial of credit.
· 79 percent contained mistakes of some kind.
· 54 percent contained personal demographic identifying information that was misspelled, long outdated, belonged to a stranger or was otherwise incorrect.
· 30 percent contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.