The Federal Trade Commission found that more than 10 million consumers were victims of errors in their credit reports that led to them falling into a lower credit tier.
Credit scores are very important when it comes to people looking to borrow money or applying for a credit card. Reportedly more than 10 million customers were found to have serious errors in their credit reports that led to consequences like difficulty in acquiring loans and facing higher interest rates on these loans. The Federal Trade Commission looked into the data of 1,001 people, collected from Experian, Equifax and TransUnion - three major credit bureaus.
It was found that more than a quarter of the people suffered at least one error in their credit report by either one of these bureaus. These errors ranged from the number of credit card payments they'd missed to the number of mortgage payments they hadn't made.
"We're talking about folks who could have gone into a better credit tier if these errors had been corrected," Paul Pautler, deputy director of the FTC's Bureau of Economics, told me.
Along with these findings being outrageous, it also shows the shadowy nature of the credit reporting industry. This coming from bureaus that can either make or break a person's creditworthiness is completely unacceptable, reports The Daily Mail. Moreover, these bureaus have the right to sell this information without a person's approval to any financial institute.
"It's unconscionable that 40 million Americans have errors in their credit reports and that 10 million have errors grave enough to cause them to be denied or charged more for credit or insurance or even be denied a job," said Chi Chi Wu, staff attorney at the National Consumer Law Center. "There needs to be serious and wholesale reform of the credit reporting industry."
