Most major events require a background check or credit report before the deal is final. What you may not know is that the major credit reporting companies have a proven record of being wrong. If you’re already struggling to pay your bills, that extra blight on your record could cost you a new apartment or better job, sinking you further into your own debt, and costing you more money along the way.
With the government receiving 8,000 to 10,000 complaints per month about these companies, they need to clean up their act.
Their errors can mean bigger bills for you.
A 2012 study found that 26 percent of consumers had errors in their credit reports, with 5 percent being severe enough to knock consumer into a costly low bracket. These errors can cost you a promotion or growth, but they can also hurt your bottom line today with rates than you deserve. Even a small error can reduce your credit rating, which means a higher interest rate on a car loan or credit card.
In researching his own errant report, NPR reporter Bobby Allyn found that companies automate parts of the process without human eyes cross checking for issues. In his case, another person with the same name affected his own record. Sorting out the mess took weeks, and often takes months–if it’s stricken from the report at all. Most people are unable to get their reports fixed simply by calling customer service, Allyn reports, and working within the system was a challenge. Credit agencies are paid by banks, landlords, and employers, not by the consumer whose rating hinges in the balance. Fixing the errors isn’t a priority, and that’s why lawsuits against these companies are mounting.
In an already struggling household, waiting months or even years for an accurate credit report is too long. The ship will have sailed on that new job offer, or that new car or better home, and your financial well-being will suffer for it.
If a background check or credit report is requested, that’s typically because you need it today-not three months from now. A mistake or careless processing at a credit agency shouldn’t affect your long-term status, it should be corrected today.