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- Twenty-five percent (25%) of the credit reports surveyed contained serious errors that could result in the denial of credit, such as false delinquencies or accounts that did not belong to the consumer; Early Show - CBS News |
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As consumers, we are often reminded that we should get copies of our credit reports. Very often its somthing thatis put off till tomorrow. And tomorrow never comes. A Credit Report could determine where your child goes to college, where you will live and how much interest you will pay on your credit card.Credit scores have always played a role in credit approval for everything from student loans to mortgages. But with banks holding up borrowers to higher standards in the wake of the financial meltdown, they are requiring much higher scores than in the past. Your score could mean the difference between getting a loan - or not. It also determines how costly your loan will be. Consumers with scores below 620 pay significantly higher rates, which could cost hundreds of thousands of dollars over the life of the loan. |
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Errors on your credit repot can create the appearance of having "too much" credit available, being over-extended, or not having been a responsible payer of his or her obligations.
The "big three" credit report bureaus - Equifax, Experian and TransUnion - have been in this business for years, so how can they possibly be making all of these mistakes?
Most mistakes can be pinned to your creditors and others providing info to the credit bureaus. As mentioned above, some mistakes happen when credit accounts change hands. Some errors are intentional. The report found that some banks admit to not furnishing bureaus with complete information on customers.
Other mistakes are simply human error. According to a credit bureau industry spokesman, some 30,000 data processors file 4.5 billion updates to credit reports each month, leaving considerable room for errors.
These errors on credit reports can cause consumers serious trouble. Many consumers probably don't realize just how serious.
It's no secret that banks use your credit report to determine interest rates on loans. The better your report, the better rate you receive.
More insurance companies examine credit reports to determine what rates you should pay on auto and homeowners insurance. According to the Insurance Information Institute, companies have found that people with poor credit reports tend to file more claims. Thus, it makes sense to charge these folks more for insurance, the companies say. This view is being challenged in some states.
Perhaps the most surprising use of credit reports is by potential employers. In recent months, newspapers have published stories about people not getting jobs after employers examined their credit reports. About 35 percent of companies report using credit reports in pre-employment screening. This number is larger - about 40 percent - among retailers. According to credit bureaus, the other industries that appear the most interested in credit histories include defense chemical, pharmaceutical and financial services.
Errors on your credit repot can create the appearance of having "too much" credit available, being over-extended, or not having been a responsible payer of his or her obligations.
The "big three" credit report bureaus - Equifax, Experian and TransUnion - have been in this business for years, so how can they possibly be making all of these mistakes?
Most mistakes can be pinned to your creditors and others providing info to the credit bureaus. As mentioned above, some mistakes happen when credit accounts change hands. Some errors are intentional. The report found that some banks admit to not furnishing bureaus with complete information on customers.
Other mistakes are simply human error. According to a credit bureau industry spokesman, some 30,000 data processors file 4.5 billion updates to credit reports each month, leaving considerable room for errors.
These errors on credit reports can cause consumers serious trouble. Many consumers probably don't realize just how serious.
It's no secret that banks use your credit report to determine interest rates on loans. The better your report, the better rate you receive.
More insurance companies examine credit reports to determine what rates you should pay on auto and homeowners insurance. According to the Insurance Information Institute, companies have found that people with poor credit reports tend to file more claims. Thus, it makes sense to charge these folks more for insurance, the companies say. This view is being challenged in some states.
Perhaps the most surprising use of credit reports is by potential employers. In recent months, newspapers have published stories about people not getting jobs after employers examined their credit reports. About 35 percent of companies report using credit reports in pre-employment screening. This number is larger - about 40 percent - among retailers. According to credit bureaus, the other industries that appear the most interested in credit histories include defense chemical, pharmaceutical and financial services.
