FTC: Credit Reporting Agencies Need To Clean Up Data

FTC

WASHINGTON—Credit reporting agencies need to do a better job of cleaning up inaccurate information on consumers’ credit reports, according to a new study from the Federal Trade Commission.

The FTC has released a follow-up study on credit report accuracy that found most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate.

The congressionally mandated study is the sixth and final study on national credit report accuracy by the FTC. It follows up on a study issued by the FTC in 2012, which examined how many consumers had errors on one of their three major credit reports.

The 2012 study found, among other things, that one in five consumers had an error that was corrected by a credit reporting agency after it was disputed on at least one of their three credit reports. The study also found that about 20% of consumers who identified errors on one of their three major credit reports experienced an increase in their credit score that resulted in a decrease in their credit risk tier, making them more likely to be offered a lower auto loan interest rate.

The follow-up study focuses on 121 consumers who had at least one unresolved dispute from the 2012 study and participated in a follow-up survey. It finds that 37 of the consumers (31%) stated that they now accepted the original disputed information on their reports as correct. However, 84 of these consumers (nearly 70%) continue to believe that at least some of the disputed information is inaccurate. Of those 84 consumers, 38 of them (45%) said they plan to continue their dispute, and 42 (50%) plan to abandon their dispute, while four consumers are undecided.

The final study also examined whether consumers from the 2012 study who had their credit reports modified after disputing information on their credit reports had any of the negative information that had been removed subsequently reappear on their reports. The study found two instances of this, representing about 1% of these consumers.

The final study recommends that CRAs review and improve the process they use to notify consumers about the results of dispute investigations, and that CRAs continue to explore efforts to educate consumers regarding their rights to review their credit reports and dispute inaccurate information.

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Section: Standard
Word Count: 550
Copyright Holder: CUToday.info
Copyright Year: 2019
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URL: http://www.cutoday.info/Fresh-Today/FTC-Credit-Reporting-Agencies-Need-To-Clean-Up-Data