WASHINGTON — About one in every 20 consumers has significant errors on his or her credit reports that could cause that person to pay more for auto loans and other financial products, according to a Federal Trade Commission report released Monday.
The study also found that about 26 percent of the approximately 200 million people covered by the U.S. credit reporting industry have at least one "potentially material error" on one of their three credit reports.
And four out of five people who took steps to fix errors with one of the three major credit reporting companies — Experian Information Solutions, Equifax and TransUnion — got their credit report changed.
The findings show that consumers need to closely monitor their credit reports, the agency said.
"These are eye-opening numbers for American consumers," said Howard Shelanski, director of the agency's economics bureau.
"Your credit report has information about your finances and your bill-paying history, so it's important to make sure it's accurate," said Charles Harwood, acting director of the agency's consumer protection bureau.
The study marks the first time the agency has taken a comprehensive look at all aspects of the credit-reporting process, including consumers, lenders and large credit reporting companies. It studied 1,001 randomly selected consumers and their credit reports and helped them identify potential errors.
While the 26 percent error rate was high, not all of the errors resulted in changes in credit scores that would cost consumers money, the study said. Of the 2,968 credit reports studied — about three for each consumer — about 2.2 percent had errors that were likely to change a credit score enough to cause someone to pay higher rates for loans or other products.
The Consumer Data Industry Association, a trade group representing credit reporting companies, cited that 2.2 percent figure in touting the accuracy of credit reports.
"Confirmation that credit reports are accurate is a good thing, but all consumers should be aware that checking credit reports every year is fundamental to accuracy," said Stuart Pratt, the group's president.
The Consumer Financial Protection Bureau, which oversees the industry with the Federal Trade Commission, reported in December that less than 20 percent of consumers obtain copies of their credit reports each year.