A first-ever study conducted by the Federal Trade Commission explores the accuracy and completeness of credit reports in the reporting and scoring process. It proves what most of us know—that we ought to be checking our credit reports more often for errors. Credit-reporting agencies don't always look or dig into consumer complaints. The study reported in February that 5.2 percent of consumers have credit report errors that could potentially cost them higher interest rates or hinder them in getting bank loans for homes, automobiles, insurance or mortgage.
Consumers are entitled to one free credit report per year, and if they find mistakes, they may dispute them. “If they don’t, they are putting their pocketbooks at risk,” says Howard Shelanski, director of the FTC’s Bureau of Economics. Moral of the story—check (and check, check, check again) your credit report to catch mistakes and increase your chances of correcting them.
Errors aren't the only thing that should be monitored. In addition to checking for inaccuracies, consumers should look for suspicious activity—which can include credit cards they’ve never had—that might be evidence of identity theft.
Do you have any glitches on your credit report that could cause penalties? To request a free credit report and help to keep your finances healthy, go to AnnualCreditReport.com.