February 13th, 2013

New FTC Study: 25 Percent of Consumers Have Credit Report Errors

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25 Percent of Cconsumers Have Credit Report Errors | Credit Karma Blog

Do we finally have the story straight?

For years there’s been an ongoing debate about accuracy of credit reports. Various studies have claimed that 3 to 25 percent of reports contain errors.

The study released in May 2011 by the Policy and Economic Research Council claimed that 19.2 percent of credit reports contain errors, but less than 1 percent of corrected errors led to significant increases in credit scores.

The main issue with this study has been that it was initiated and paid for by the Consumer Data Industry Association, a trade group for the credit bureaus.

New research unveiled

Now, the FTC has released its own eight-year study on the accuracy of credit reports and the financial impact of credit report errors. Here are some of the key findings:

  • 25 percent of consumers identified errors on their credit reports that might affect their credit scores.
  • 20 percent of consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports.
  • 80 percent of consumers who filed disputes experienced some modification to their credit report.
  • About 10 percent of consumers saw a change in their credit score after the CRAs modified errors on their credit report.
  • About 5 percent of consumers had a maximum score change of more than 25 points and just one in 250 consumers had a maximum score change of more than 100 points.

How bad can an error really be?

The FTC study reveals that 5 percent (instead of the previously believed 1 percent) of consumers have errors on their credit reports that could result in serious financial ramifications. A 25-point increase in your credit score could mean two things: better approval odds and lower interest rates. Let’s look at the example of applying for a mortgage.

Just like we covered in our video, you pretty much need a credit score of 620 just to get approved for a mortgage. If you have an error that’s depressing your would-be approvable score to a guaranteed-denied 600, you’ll be out of luck and hit with a hard inquiry just for applying for that mortgage.

Let’s say you have a score of 700, but it would be a 725 if you corrected a serious error on your credit report. You apply for your mortgage and get approved, but because you’re not in the ideal range of 720 or higher, you’ll end up paying thousands of dollars extra in interest over the life of your home loan.

So, can credit report errors be a big deal? Yes, absolutely.

So, what can you do?

The good news about the FTC’s report is that the eight-year investigation revealed that most people (80 percent) who filed a dispute about an error on their report saw at least some change in their credit report as a result.

It can take some time to correct an error, but if it’s at all possible that you can, you should. Follow the guide in 5 Steps to Cleaning Up Credit Report Errors. If you prefer to skip contacting the credit bureaus altogether, work with a credit repair company like Lexington Law or go for a direct dispute with the information provider reporting the error to the bureaus.


is the Social Media Manager and Writer at Credit Karma, where she’s been since February 2011. When she’s not writing about credit and finance all over the web, you can find her playing her guitar, catching the latest movie, training for her next race or just exploring the city of San Francisco. Say “Hi” on Twitter: @bhardeman.

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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. I noticed I have a report of late payment at Catherines. I owe nothing there. I found no balance Independant Bank Visa, nor for Bank of America card with a balance of $5743.33. How can you accurately display my credit score if don’t have all the information?

    Suseann Van Liew at 12:53 pm on July 31, 2015
  2. Enola Guerrero

    Hi Suseann – To fix any errors you see on your report, please go here: https://www.creditkarma.com/article/dispute-credit-report-errors


    Enola Guerrero at 10:19 am on August 3, 2015

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