Credit Reports: How Accurate Are They?

There have been limited studies on the accuracy of credit reports. One, however, was conducted recently on the web by the American Consumer Credit Counseling (ACCC), a non-profit credit counseling agency. There were 150 respondents, which is not a statistically significant sample, but it gives you a feel for inaccuracies on some credit reports.  Of the 150 responders, only 13 percent did NOT find any errors.

Survey Highlights

22 percent found errors in reporting of collections, charge offs and late payments older than seven years.

15 percent found inaccuracies in their personal identifying information such as name and address.

19 percent of respondents had incorrect account details.

15 percent identified accounts and delinquencies on their report that were not theirs.

13 percent reported no errors on their credit report.

“It’s important for consumers to understand that a credit report can impact their ability to borrow, afford a home and even get an education,” said Steve Trumble, president and CEO of Newton-based American Consumer Credit Counseling. “This survey indicates that consumers should not only be reviewing their credit report twice each year, but also should expect to find at least one reporting error.”

This shows the importance of checking your credit report for errors.  You don’t want data that isn’t ours, especially that which is negative data. If you don’t check your report, you won’t know there are any errors.  If you are getting ready to apply for a loan or credit card, you should check your credit report before doing so.  Errors take time to fix with the credit bureaus and you don’t want to delay the loan process or possibly not qualify for the loan.

Order your free credit report

You can obtain your free credit report for each of the three credit reporting agencies (Equifax, Experian and TransUnion) annually from www.annualcreditreport.com or by calling 877-322-8228.  This is the only free site that was set up by the law per the Fair Credit Report Act.  Other sites may have free in their name or claim they are free, but this is the official site.  There is a dispute process to follow, if you find errors.

Also, read >  7 Reasons to Consider a Business Credit Card

Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.