Yet another study highlights the inevitable imperfection of credit reporting. Almost 1 in 4 Americans reported encountering problems with their credit reports, according to a new report from FindLaw.com, a popular legal information site.
The study found that 23 percent of survey respondents found incorrect or outdated credit information, such as bankruptcies or late payments, and inaccurate personal information on their credit reports. They also reported identity theft or information belonging to someone else.
Others said their credit score was incorrectly calculated as too-low credit or they were denied credit because of errors on their credit report.
Despite the frustrations, more than two-thirds of those who found a problem were able to correct it, while 14 percent fixed one of the multiple problems they found. Less than 1 in 5 weren't successful in correcting their credit report errors at all.
The FindLaw.com study echoes a similar study released by the Federal Trade Commission in February. That one found that 1 in 20 credit reports contained a costly error that resulted in a lower credit score and higher interest rates or insurance premiums. The most common confirmed errors related to account information and collections items.
The studies underscore the nearly universal advice from personal finance experts (including this one) to check your credit report every year for mistakes. The government makes this easy and free. U.S. consumers are entitled to one free credit report every 12 months from the major credit bureaus -- Equifax, Experian and TransUnion. Get one at AnnualCreditReport.com and double-check it.
If you find an error, each bureau has an online dispute form that you can fill out. You may need to include supporting documentation for your claim. The bureaus by law will investigate your claim by contacting the creditor to verify the information. They will change the information if confirmed by the creditor.
There's a chance the creditor will deny your dispute. At that point, you can file an online complaint with the Consumer Financial Protection Bureau, which will help mediate your dispute. You can only file a claim with the CFPB after you have directly filed your dispute with the credit reporting agencies.
As a last course of action, consumers can contact a lawyer that specializes in consumer debt, debt collection and the Fair Credit Reporting Act. Most reputable attorneys will meet with you initially for free to go over your case.
Have you run into trouble correcting a credit report error? What was it and what did you do?
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