According to a study done by the FTC (Federal Trade Commission) your credit reports has errors. These findings were announced today by the NCLC (National consumer Law Centers) and U.S. PIRG (US Public Interest Research Group) and confirm their own findings based on a previous study.
The study was released on a 60 minute expose on the Credit Reporting Agencies. The study found the following facts:
21% of Consumers have Verified Errors
13% had Errors that Effect there Credit Report
5% had errors that were serious enough to cause denied credit or pay a higher interest rate
Ed Mierzwinski US PIRG Consumer Program Director said that these finding were no surprise. Ed also stated “We’ve criticized the credit reporting industry for decades over unacceptable levels of seriously damaging mistakes, many of which are entirely preventable.”
Mierzwinski noted that the FTC study found that the percentage of serious errors was about 10 times the percentage reported by a May 2011 industry-funded study, which had claimed that only 0.51% of credit reports had errors serious enough to cause the consumer to be denied or pay more for credit.
These findings were said to be “pretty troubling information” and that the error rates were “pretty high.” according to FTC Chairman Jon Leibowitz.
Well apparently not much has changed in the last decade. Here is a C-SPAN video that was released in 2002 that outlines similar issues in a consumer groups report titled “Consumers and Credit Reports.”
Mr. Mierzwinski concluded that “Consumers need to be protected in the entire financial marketplace, at banks and non-banks, including credit bureaus, who have acted as reckless gatekeepers to financial and employment opportunity for too long.”
Howard Shelanski, Director of the FTC’s Bureau of Economics stated that “These are eye-opening numbers for American consumers,” “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”
So what can you do to prevent these errors? Unfortunately there is no preventable measure to prevent errors from happening. Your best defense against the credit reporting agencies is taking a proactive approach by reviewing your credit report on quarterly bases for errors.
To review your credit reports go to AnnualCreditReport.com. This website was set up by the 3 credit reporting agencies in order to be in compliance with FACTA allowing consumers access to 3 free credit reports per year.
Tens of millions of Americans live their normal, everyday lives totally oblivious to their credit score, and the positive or negative consequences it can have on their financial future. According to the credit bureau Experian, over one third of Americans had a credit score under 600 in 2016 which is the number that indicates bad credit. Bad credit can be caused by poor financial decisions, unexpected expenses/emergencies or more likely, the lack of knowledge of the complicated process of managing a credit score. Millions of people have never even checked their credit reports even though it affects their daily financial life.
Although managing your credit can be a challenging process to handle yourself the consequences of ignoring it can be devastating financially. Poor credit can keep you from buying the new car you need, the dream home you’ve always wanted, or even the loan you need to take out to put your child through college.
Now even if you are lucky enough to be approved for your loan, car, or home with bad credit your credit score will still affect the interest rates that you will be forced to pay back. This difference is only a mere percentage point or two, but when you are dealing with six to seven figure costs, the difference will be in the tens of thousands.
This could be the difference in paying an extra $200 dollars a month on your mortgage for the next 40 years of your life!
Your credit can also have side effects that affect your everyday life as well. Having bad credit carries certain stigmas and stereotypes with you. For example, someone with bad credit will have a tougher time finding work, higher credit card fees, and higher car insurance rates. This is due to companies generalizing those with bad credit; if you mishandle your own money who is to say you won’t be a reckless driver or careless worker.
Unless you are someone who always carries cash on them credit cards will cost you extra, too. Credit card companies will charge those with good credit significantly less on interest rates. Having bad credit could cost paying an extra five percent on everything you put on your card. Credit is even effecting your weekly trip to buy groceries.
Because credit is essential in the process of major life choices like going to college, using a credit card, and buying a car or home, having bad credit will certainly cost you hundreds of thousands of dollars over the course of your life. The gap between living comfortably or constantly in debt can revolve around having good credit or not.
I invite you to clink on the link below to discover the way that FES can get you to financial freedom to enjoy the premiums of life with good a good credit score!
To Your Financial Future,
There’s no denying that we are a society that’s addicted to instant gratification and we suffer from lack of focus. When people talk about credit restoration, it’s often with the pretense that it’s got to happen quick and they want minimal involvement. To RESTORE your credit, you’re going to have to do 2 things, first, lose the instant gratification mindset, and secondly, take a focused, hands-on approach. This will help create short term and long-term results.
Restoring your credit should not be looked at as a FAST or ONE-TIME event.
Now this doesn’t mean that you can’t restore your credit quickly, that will depend on the condition of the credit at the start of the credit restoration process. As well there will be times in the future where you will need to tweak somethings to improve your credit score. Perhaps your preparing for a purchase of a new home or car. So, you must approach your credit from a long-term perspective, your credit and credit score is going to be with you for the rest of your life and is changing all the time.
Your credit score has played a role in everything you’ve done in life till this point and will continue to play a role in your life. Everything from housing, to transportation, getting a job, cell phones, how much you pay for utilities and insurances, not to mention other missed opportunities. It will determine what you can or cannot do today and in the future! It is one of the most important pieces of your financial picture. It must be a made priority.
Think of your credit like would your child. What would happen if you left your child unattended and never checked on them. What if you never feed them? What if you never taught them anything? That probably wouldn’t turn out well. Unfortunately, that’s exactly how a lot of people treat their credit, for years!
Your credit is no different than a child. You must attend it, feed it, learn about it, keep an eye on it! If you do that, you will most likely have GREAT credit and credit score! The good news is, regardless of what your current credit situation is, you can start to change it today!
If you want a GREAT credit score then EDUCATE yourself about how credit works and how to best take care of it for the future use. Your credit score is your child. It needs your attention to be the best it can be. When that happens, the pay-off will be HUGE!