WASHINGTON — One in four consumers found an error in a credit report issued by a major agency, according to a government study released Monday.
The Federal Trade Commission study said 5 percent of the consumers identified errors that could lead to them paying more for mortgages, auto loans or other financial products.
The study looked at reports for 1,001 consumers issued by the three major agencies – Equifax, Experian and TransUnion. The FTC hired researchers to help consumers identify potential errors.
The study closely matches the results of a yearlong investigation by The Columbus Dispatch. The Ohio newspaper’s report last year said thousands of consumers were denied loans because of errors on credit reports.
The FTC says the findings underline the importance of consumers checking their reports. Consumers are entitled to a free copy of their report each year from each of the three reporting agencies.
The FTC study found that 20 percent of consumers had an error that was corrected by a reporting agency after the consumer disputed it. About 10 percent of consumers had their credit score changed after a reporting agency corrected errors.
The Consumer Data Industry Association, which represents the credit reporting agencies, said the study showed the proportion of credit reports with errors that could increase rates for consumers was small.
The study confirmed “that credit reports are highly accurate, and play a critical role in facilitating access to fair and affordable consumer credit,” the association said.
Experian, a British company with international operations, said that while the study confirms consumer credit reports are predominantly accurate, Experian “is not satisfied with this result and we continue to work toward ensuring credit reports are 100 percent accurate.”
The new U.S. Consumer Financial Protection Bureau has authority to write and enforce rules for the credit reporting industry. In September, it began ongoing monitoring of credit agencies’ compliance. It’s the first time they have faced such close federal oversight.
The bureau hasn’t taken public action against the agencies, but it is accepting complaints from consumers who discover incorrect information or have trouble getting mistakes corrected.
The agencies have 15 days to respond to the complaints with a plan for fixing the problem; consumers can dispute that response.
By contrast, the FTC can only take action if there is an earlier indication of wrongdoing. It cannot demand information from or investigate companies that appear to be following the law.