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Urgent warning for Americans as nearly HALF face credit report errors that can ruin finances - how to check YOURS
Nearly half of all credit reports contain errors which could impact Americans' ability to apply for credit cards - or mean they have to pay more for loans.
That is according to a worrying new study from watchdog Consumer Reports and non-profit Work Money.
Of the more than 4,300 people who volunteered to take part in the study, only around 3,200 reported actually being able to access their reports.
And 44 percent of those participants discovered issues with the financial or personal information on their report.
More than a quarter of those mistakes were serious enough to affect their ability to take out credit.
Of the more than 4,300 people who volunteered to take part in the study, only around 3,200 reported actually being able to access their reports
The errors participants reported ranged from the wrong address being listed or their name being misspelled - or even the wrong name appearing on their report.
But many volunteers also reported serious issues related to their financial information.
These included unrecognized or duplicate accounts, unrecognized debt reported to collections, payments wrongly reported as late and payments wrongly reported as missed entirely.
Information in your credit report is used to make all kinds of financial decisions about you, so errors can hurt your ability to get a loan or credit card, rent an apartment, or even get a job, said Ryan Reynolds, financial policy analyst at Consumer Reports.
'Errors on credit reports can even cause a person to have to pay more for car insurance,' he said, and can mean having to pay higher interest rates if you apply and are accepted for a credit card or loan.
One volunteer in the watchdog study was Tammy Chambers, 55, from Tacoma, Washington.
She was saving up to buy a house after going through a divorce when her credit score suddenly plummeted from over 800 to 500.
Fraudulent loans totaling more than $2,000 had been taken out in her name, which had then been reported as delinquent.
She spent months speaking to the loan company and the credit agency Experian, trying to get the debts removed - and they were finally erased earlier this year.
'I did my due diligence. I had no idea this could happen,' she told USA Today.
According to Consumer Reports, most of the fault did not lie with Experian, but with the company that issued the loans and kept reporting them after she had filed disputes.
As was the case for Chambers, these kinds of financial inaccuracies can lower your credit score substantially, according to the report.
For example, in the case of a typical mortgage, 'the difference between having mediocre credit and good credit is about $150,000 over the life of the loan,' said Work Money CEO Carrie Joy Grimes.
Errors can hurt your ability to get a loan or credit card, rent an apartment, or even get a job, said Ryan Reynolds, financial policy analyst at Consumer Reports
The study is in line with data about credit reports from the Consumer Financial Protection Bureau (CFPB), which says incorrect information on credit reports is the top complaint it receives.
In 2021, the agency received 165,129 such complaints - which more than doubled to 430,600 in 2023.
If you spot a mistake on your credit report you should file a dispute, according to Consumer Reports.
To do this, first gather up evidence - including account statements and payment records - and print out a hard copy.
The errors participants reported ranged from the wrong address being listed or their name being misspelled - or even the wrong name appearing on their report
Then write a letter to each of the three main credit bureaus - Experian, Equifax and TransUnion.
Make copies of the entire packet, include one for yourself, and send them via snail mail, certified, to each of the credit bureaus, it recommends.
'You want to create a paper trail,' said Reynolds, and companies have 30 days to respond.
If that does not result in your desired decision, you can then file a complaint with the CFPB.
If that, too, is denied, you could consider hiring an attorney who specializes in credit law, said Consumer Reports, which you can find through the National Association of Consumer Advocates.