In FTC Study, Five Percent of Consumers Had Errors on Their Credit

About the Study

The FTC report is the first major study that looks at all the primary groups that participate in the credit reporting and scoring process:  consumers; lenders/data furnishers (which include creditors, lenders, debt collection agencies, and the court system); the Fair Isaac Corporation, which develops FICO credit scores; and the national credit reporting agencies (CRAs).  It is based on work with 1,001 participants who reviewed 2,968 credit reports with a study associate who helped them identify and correct possible errors on their credit reports.

Consumers in the study were selected to match the demographic and credit score information of the general public, and participants were encouraged to dispute errors that could affect their credit standing.  Credit reports with potential errors identified by study participants were sent to Fair Isaac (FICO) for rescoring. 

After completing the FCRA dispute process, study participants were provided with new credit reports and credit scores. The original reports were then compared with the new reports.  If any modifications were made as a result of the disputes, the impact of errors on the consumer’s credit score was determined.

Congress directed the FTC to conduct a study of credit report accuracy and provide interim reports every two years, starting in 2004[1] and continuing through 2012[2], with a final report in 2014.  The reports are being produced under Section 319 of the Fair and Accurate Credit Transactions Act, or FACT Act.

Information for Consumers

The FTC has a wide range of general information for consumers on credit reporting issues, including Free Credit Reports[3], Disputing Errors on Credit Reports[4], and Your Source for a Truly Free Credit Report?[5], as well as a new consumer blog posted titled It Pays to Check Your Credit Report[6].

It also has information available on how credit scores affect the price of credit and insurance[7] and what consumers need to know about their credit reports when looking for a job[8].  Finally, the FTC has a video for consumers on how to get a free credit report[9].

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