(WASHINGTON) — If you’re reading this, you probably have a credit file. Nearly every American is the subject of a unique credit report, detailing credit cards, loans, and bank accounts.
But for the first time, the federal government is taking a look at how the three big credit reporting companies – Equifax, Experian, and TransUnion – handle consumer data.
The Consumer Financial Protection Bureau (CFPB) says there are several things Americans can learn from its report: namely that how you manage your credit cards accounts for more than 50 percent of your credit score.
Big banks also play a disproportionately large role in credit reporting, meaning even a single account could dramatically affect your chances of securing a mortgage or car loan.
Richard Cordray, president of the CFPB, says it’s a lesson too many credit card users learn the hard way.
“Especially around this holiday season, consumers may take out a retail credit card in order to save 20 percent off their purchases on a given day,” Cordray said in a statement. “If they are not responsible with that one card, it could end up costing them a lot more down the line when they go to take out a mortgage and that credit card is a black mark on their credit report.”
He added that the data showed only one in five Americans checks their credit report in a given year – a shame, he says, since a correctable error could have devastating consequences.
“If consumers are not checking their reports, these errors can persist and pop up when a consumer can least afford them,” he said.
The CFPB said that since it only began tracking credit reporting agencies recently, this report serves more as a baseline for knowledge than an indictment of a particular practice.
The report estimates that Experian, Equifax and TransUnion each maintain files on about 200 million Americans, and make 36 billion adjustments to their files each year.
Copyright 2012 ABC News Radio
Heidi Hatch, KUTV
Jeff Wuorio, Deseret News