(WASHINGTON) — Five percent of consumers had errors on one of their three major credit reports, potentially leading to higher costs for loans and insurance, according to the findings of a Federal Trade Commission study released Monday.
The FTC said it was the “first major study,” as directed by Congress, that looked at all primary groups that participate in credit reporting and scoring. The study analyzed 1,001 participants who reviewed 2,968 credit reports to identify and correct possible errors on their reports.
The three major credit bureaus, Equifax, Experian and TransUnion, provide free annual credit reports under the Fair Credit Reporting Act at annualcreditreport.com.
In some cases, a consumer will have to contact the creditor to fix an error.
According to the 208-page report, 26 percent of the participants identified at least one “potentially material error” on at least one of their three credit reports.
Though 206 consumers, or 21 percent of the participants, “had a modification to a least one of their credit reports after the dispute process,” only 129 people, or 13 percent of participants, experienced a change in their credit score as a result of these modifications.
The study found that 211 reports and 129 consumers experienced modifications that resulted in a score change.
Of the 211 reports with a score change, 62 reports, or 29 percent of reports with a score change, had a score increase of more than 25 points. And 129 reports, or 61 percent of reports with a score change, had a score increase of more than 10 points.
Copyright 2013 ABC News Radio
James Hanlon, CNN
Wayne Drash, CNN