88% of Credit Bureau Information is Incorrect

Tristan Powys (Credit Manager) @ Lucid Living

Beware your credit reports held by credit bureaus – there is a good chance some of the information is wrong.
While some incorrect information can have serious consequences, other information may be of a less serious nature. That however would be a matter of debate and depend to some extent on what suffering, if any, the wrong information had on a consumer – or on a credit giver like a store or a bank.

The National Credit Regulator (NCR) reported that 14 836 disputes were lodged on information held on consumer credit reports for the three months ended December 2010 – which was a decrease of  34.3% on the three months before – June to September 2010.

NCR’s Darrell Beghin who deals with credit information and research, said that TransUnion Credit Bureau (formerly ITC) had in contravention of the National Credit Act (NCA) reported certain data inaccuracy discrepancies as “queries” and not “disputes” on consumer’s credit reports.

The issues that arose out of this had been settled within the industry and the regulator, she said.  Beghin explained that the definition of a dispute was set out in the NCA and meant any discrepancy that a consumer perceived between items in the credit report and what that consumer believed to be the real facts, could be recorded as a dispute.

Notwithstanding  this, in the three months to December 2010, (after the anomaly had been sorted out) 14 836 disputes were lodged about the accuracy of information on credit reports, of which more than 6 000 had been resolved in favour of the complainant and only 847 had found the information could remain unchanged.

Put another way 88% of the information on the credit bureaus may be inaccurate.

This would accord with findings of large consumer organisations in the USA that much incorrect information on individuals and their credit reports has been held by credit bureaus.

Reports in the USA have established that at least 70% of the information held by credit bureaus was inaccurate. Furthermore it was established that in 25% of the cases, the inaccuracy was of such a serious nature that it prevented the consumer from accessing credit.

The NCR’s Beghin believes individual consumers should be encouraged to check their credit reports regularly to ensure accuracy. Of 18.51 million credit-active consumers, in the quarter to December 2010, only 79 635 credit reports were issued to consumers.