Mistakes on credit reports resulting in false credit scores can cost consumers thousands of dollars. A recent investigation by CBC News found that credit reporting errors have not only prevented consumers from getting loans, lines of credit and credit cards, but consumers are charged higher interest rates. In many cases, consumers are unaware of negative information on their reports.
It”s not surprising. The two credit reporting agencies – TransUnion Canada and Equifax – are inundated daily with hundreds of pieces of information with regard to consumer accounts and payment histories. That information comes from companies such as phone service providers and banks. These companies pay a fee for the bureaus to track clients and in return the credit bureaus provide the companies with access to consumer credit reports, which contains information from all the reporting agency”s client companies.
A national survey in 2005 conducted by the non-profit Public Interest Advocacy Centre found that 18 per cent of the people surveyed found mistakes in their credit report and 10 per cent of those believed they were denied financial services because of those errors.
One Toronto, Ontario para-legal who has represented clients in credit disputes, estimates the percentage of errors is higher than 18 per cent. Of his 3,000 clients, one-third of them have found inaccuracies in their credit reports. Inaccuracies can range from:
- Mistaken identity, whereby a collection gets registered against the wrong consumers – this usually happens when names are similar
- Numerous undischarged items under public records
- Unverifiable late payments
- Incorrect names, DOB, SIN
- Statute of limitations with collections and other debts
The onus is on the member companies to provide accurate information to the two bureaus and it”s up to those companies to pokies online rectify any errors. When a consumer exposes an error, both Equifax and TransUnion require the creditors who supplied the information to sign off. Even that can take some time and isn”t always effective.
With so much emphasis on credit scores, it”s important that consumers are aware of what”s being reported in their individual files. Consumers can request to see their credit rating, however few do. Unknown errors can be there for months, sometimes years, and could potentially lead to extra interest costs or other issues.
At this time, there is no federal oversight however under provincial consumer protection legislation companies can face fines if misinformation is not amended.
Consumers can request their credit report information via mail or online. Credit reports via mail are free but do not include your credit score. Credit reports and scores area available online, for a small fee. For more information visit Equifax at www.equifax.ca and TransUnion at www.transunion.ca.
You can also contact your mortgage professional who can help you access your report and offer advice on how to remove inaccuracies and how to improve your credit score.