Washington, DC – U.S. Senator Amy Klobuchar today called for swift action to protect consumers from errors on their credit reports. A recent report by the Federal Trade Commission (FTC) found that over 25% of consumers’ credit reports contain major errors, often leading to less favorable loan terms or denial of credit. In a letter to the three major credit rating agencies, Klobuchar urged them to take immediate steps to fix reporting errors and ensure accurate credit reports.
“Consumers should not be denied a mortgage, passed over for a job, or forced to pay a higher interest rate because of a simple error on their credit report,” said Klobuchar. “The credit rating agencies need to clean up their act and do everything they can to fix these inaccuracies that are wreaking havoc on people’s lives across the country.”
A recent report by the FTC found that 26% of consumers’ credit reports contain major, material errors. The FTC also found that 5% of consumer credit reports include errors that could result in less favorable loan terms or lead to an outright denial of credit. The report is the result of an eight-year study examining close to 3,000 credit reports.The study suggests that up to 40 million consumers have errors on their credit reports.
The full text of the letter is below:
February 21, 2013
Richard F. Smith, CEO
1550 Peachtree Street NE
Atlanta, GA 30309
Victor Nichols, CEO
Experian North America
U.S. Operational Headquarters
475 Anton Boulevard
Costa Mesa, CA 92626
Jim Peck, CEO
555 W Adams St.
Chicago, IL 60661
Dear Messrs. Smith, Nichols, and Peck:
I write to you today regarding a recent report by the Federal Trade Commission (FTC) that found major mistakes and errors on millions of consumer credit reports. According to this report, 26% of consumers’ credit reports contain major, material errors. More troubling, the FTC also found that 5% of consumer credit reports include errors that could result in less favorable loan terms or lead to an outright denial of credit altogether.
Consumers should not be denied a mortgage, passed over for a job, or forced to pay a higher interest rate because of a reporting error. Given the serious consequences of erroneous credit scores, consumers deserve to feel confident that the information on their credit report is accurate and up-to-date. Consumers also need to know that the reporting agencies give prompt and full attention to their disputes and questions. Along these lines and in light of the FTC’s report, I urge you to take all necessary measures to ensure that your reports are accurate and that consumers have a meaningful and expeditious way to correct mistakes and remedy any repercussions resulting from an erroneous report.
I look forward to working with you to make sure that consumers are protected from preventable errors on their credit reports.