* FTC says consumers should check reports annually
* Errors could mean more costly loans
* Experian says some errors were in consumers' favor
WASHINGTON, Feb 11 One in twenty American
consumers had mistakes on their credit reports that would have
increased their interest rates on loans or caused them to pay
more for insurance, the Federal Trade Commission said in a
report released on Monday.
Experian, Equifax and TransUnion
are the leading consumer credit reporting agencies, and the FTC
has encouraged people to check the three reports annually in
order to catch mistakes.
Some 26 percent of consumers found a mistake in one of their
three credit reports and 21 percent requested and got their
report changed, the FTC said in a 370-page report written at the
request of Congress and released on Monday.
For about five percent of the consumers surveyed, the change
in the credit score was big enough to affect how risky a
potential lender would view the consumer and what interest rate
they would offer, the report said.
The data drove home the need for consumers to keep tabs on
their credit history, said Howard Shelanski, director of the
FTC's Bureau of Economics.
"These are eye-opening numbers for American consumers," said
Shelanski in a statement. "The results of this first-of-its-kind
study make it clear that consumers should check their credit
In response, Experian argued that while there were mistakes
in the reports, in most cases they did not change credit scores
enough to matter, and that in a small percentage of cases a
mistake would accidentally raise a credit score in the
"After thoroughly reviewing the FTC report issued today, we
believe it confirms that consumer credit reports are
predominately accurate and serving lenders and consumers well,"
the company said in an emailed statement. "That said, Experian
is not satisfied with this result and we continue to work toward
ensuring credit reports are 100 percent accurate."
Equifax argued that other studies had found lower error
rates than the FTC in the credit reports, and said that they
resolved three out of four disputes within two weeks.
"Our goal is perfection," the company said in an emailed
statement. "For that to happen, all parties - data furnishers,
consumers, government agencies and the CRA's (credit reporting
agencies) - have a responsibility and need to work together."
TransUnion, in a statement, also urged consumers to double
check their credit reports and dispute any errors.
A total of 1,001 people participated in the study and they
viewed 2,968 credit reports, just under three per consumer.