The next time you apply for a credit card, a car loan or a mortgage, a three-digit number will determine whether your would-be lender will give you a sweet interest rate — or point you to the door. That number, of course, is your credit score, and three big national credit ratings agencies keep the files on you that factor into it. Lots of them. The ratings agencies take in updates on more than 1.3 billion credit accounts across the country every month. And, as the Federal Trade Commission just found, mistakes happen.
FTC investigators determined that at least a fifth of consumers have a material error on at least one of their credit reports, and at least 13 percent have one that affected their credit score.
The industry argues the numbers show their files are generally very accurate. Critics say they are evidence of an indefensibly sloppy industry happy to rake in $4 billion a year while investing too little in preventing or fixing inaccuracies, with sometimes massive consequences for those burdened by an unfair credit report.
As the FTC’s report shows, the government has started keeping closer track of the ratings agencies. The Consumer Financial Protection Bureau, too, recently began monitoring them and the creditors who fill their files with information on their customers. The agencies’ work should help the public monitor the progress — or lack thereof — from here.
The Washington Post (Feb. 17)