Is your credit report accurate?
Study found it may not be.

Inaccurate credit reports could damage your ability to buy a home or car.

According to a new survey released by a consumer watchdog group U.S. PIRG (Public Interest Research Groups), one in four credit reports contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan or even a job. The survey shows how prevalent mistakes are on credit reports.

In their survey, US PIRG found mistakes in 79 percent of the 197 reports reviewed, including misspellings and duplicate listings. One in four reports contained errors, such as incorrect delinquencies, that could be used to deny a consumer a loan or credit card, PIRG said.

Some of the key findings in the study conducted by PIRG include:

• Twenty-five percent (25%) of the credit reports contained errors serious enough to result in the denial of credit;
  
  
• Seventy-nine percent (79%) of the credit reports contained mistakes of some kind;
  
  
• Fifty-four percent (54%) of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;
  
  
• Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.

Bad information can mean consumers get socked with higher rates and lender fees due to bogus data. Those mistakes ruin the financial reputations of hardworking Americans.

Credit Report is your financial track record

Credit reports are a compilation of your creditworthiness based on information collected from lenders and other sources. The reports tally your loans and credit cards as well as your payment habits. Banks use them to determine whether you can get a mortgage or car loan. Landlords look at them to decide to rent you an apartment. A potential employer may check them before hiring you.

A report's contents also determine a consumer's credit score, a number that predicts one's likelihood of repaying bills.

Three national credit bureaus, Equifax, Experian, and Trans Union, collect and compile information about consumer creditworthiness from banks, creditors and from public records such as lawsuits, tax liens and bankruptcy filings.

Errors could ruin your financial future

Errors happen through identity theft, coding and reporting mistakes, or when a credit bureau mixes account information from consumers with similar names or addresses.

Errors could show that a consumer was carrying too much debt, or that an account was in collection or that a loan was delinquent. A growing problem for consumers is identity theft by Internet scammers, who can destroy people's credit ratings unless detected in time

Check your credit report regularly

Consumers should check their credit records regularly. PIRG recommends that consumers examine all three credit reports at least once each year, before they apply for credit. Checking reports is particularly important for those buying cars or homes, both credit bureaus and consumer advocates note. Not only can credit inaccuracies cost a consumer a loan, but they can significantly raise the cost of credit.

Indeed, a single serious mistake can cut a consumer's credit score by 50 points, which could result in several more hundred dollars in his/her monthly mortgage payments.

You have a right to examine your credit report and your credit score and you should exercise that right every year -- more often when you plan to apply for credit for a large purchase, including a home loan, second mortgage or refinance loan.

posted June 30, 2004.