When it comes to your personal credit, what you don't know can hurt you. In a study completed in 2004 by the U.S. Public Interest Research Group (U.S. PIRG), as many as 79 percent of credit reports contain errors. A quarter of the reports checked had errors so serious that the consumers could be dumped into higher-interest-rate categories or denied credit altogether. Whether listed as the result of identity theft or an innocent typo, errors on a credit report can have serious repercussions for the victim.
Even utility companies, cable companies and cell phone providers pull the credit reports of interested partiesCourthouses, workplaces and rental offices routinely pull credit reports and use the information in them to judge our character. Auto and property insurance companies use the information in our reports to decide how much to charge us. People with poor credit appear to file more claims and therefore cost insurance companies more money. Even utility companies, cable companies and cell phone providers pull the credit reports of interested parties before deciding what types of services they'll offer each customer and the price at which those services will be offered.
Simple MistakesAccurate credit information is important. So how do so many mistakes manage to creep into our credit reports? Experian, one of the three major credit reporting agencies, receives between thirty to forty million new bits of information every day. Because of the privacy rights of consumers and the huge amounts of data they receive everyday, credit bureaus have no way of catching mistakes or screening for individual errors. With two other credit bureaus, TransUnion and Equifax, besides Experian collecting information, the chances of errors getting through are overwhelming. The relationship between the bureaus and the creditors is also problematic. Communication between the two is basically one-sided as the creditors send information and the credit bureaus receive it. This means that although the credit bureaus may be aware of an error and even remove it from a person's credit report, the creditor will probably continue reporting, allowing the erroneous item to continue popping up in your credit history.
Even utility companies, cable companies and cell phone providers pull the credit reports of interested partiesCourthouses, workplaces and rental offices routinely pull credit reports and use the information in them to judge our character. Auto and property insurance companies use the information in our reports to decide how much to charge us. People with poor credit appear to file more claims and therefore cost insurance companies more money. Even utility companies, cable companies and cell phone providers pull the credit reports of interested parties before deciding what types of services they'll offer each customer and the price at which those services will be offered.
Simple MistakesAccurate credit information is important. So how do so many mistakes manage to creep into our credit reports? Experian, one of the three major credit reporting agencies, receives between thirty to forty million new bits of information every day. Because of the privacy rights of consumers and the huge amounts of data they receive everyday, credit bureaus have no way of catching mistakes or screening for individual errors. With two other credit bureaus, TransUnion and Equifax, besides Experian collecting information, the chances of errors getting through are overwhelming. The relationship between the bureaus and the creditors is also problematic. Communication between the two is basically one-sided as the creditors send information and the credit bureaus receive it. This means that although the credit bureaus may be aware of an error and even remove it from a person's credit report, the creditor will probably continue reporting, allowing the erroneous item to continue popping up in your credit history.
Posts
No comments:
Post a Comment