A typographical error two and a half years ago transformed Nancy W. Urich into a bad credit risk. Now she is suing a major credit- reporting company she says won't correct the error and clear her name. "It's a nightmare," said Urich, a registered nurse. "It's almost like a black mark in the middle of your forehead."
Hers is not an isolated case. Errors in credit reports are common, according to Consumers Union, the publisher of Consumer Reports. In fact, five bills now before Congress offer a variety of suggestions for overhauling the $1-billion industry.
Mrs. Urich filed a lawsuit last week against TRW Inc., one of the nation's three largest credit-reporting companies. The suit alleges that TRW has violated federal law by failing to erase another woman's credit history from Mrs. Urich's report.
Susan Murdy, spokeswoman for the informational services division of TRW, said it is company policy not to comment on pending lawsuits.
Mrs. Urich said she is one of those people who pays off her credit cards at the end of the month. That's why she was shocked when she was turned down for a MasterCard in 1988 because she was considered a bad credit risk.
"I almost died" when she read the letter, she said. "I knew it wasn't me" that the credit card company was talking about. "I had even gotten letters thanking me for being so prompt with my payment."
Mrs. Urich, whose name was Nancy L. Porter at the time, ordered a copy of her credit report to find out what was wrong.
The report she received had the wrong middle initial in her name and the wrong Social Security number. It appeared that her credit information had been merged with that of another person with a similar name but a different middle initial. The report she received said she owed money to a catalog ordering company, a gasoline credit card company and Tampa General Hospital.
"I have never even walked into Tampa General Hospital," the 39-year-old registered nurse said. "They had me owing for things that I had never even thought of buying."
Mrs. Urich notified the credit-reporting company that an error had been made.
"I thought the whole thing had been cleared up," she said.
Then she applied for a mortgage with her husband after they married a year and a half ago.
"I hit the same thing again," she said. The mortgage was denied until Mrs. Urich's attorney, William S. Jonassen, was able to get a clean credit report for her.
Again, thinking the problem was solved, Mrs. Urich at her husband's urging canceled all the credit cards she had under her former name.
"That was a mistake," she said, because she was turned down several times when she applied for new credit cards. Each time she was turned down she asked for a copy of her credit report and found it contained the same debts she thought had been erased.
Jonassen has been working with Mrs. Urich from the beginning trying to clear up the problem. He said taking the case to court was a last resort.
Twice, Jonassen said, he thought the problem was solved, only to discover that the wrong information kept appearing whenever Mrs. Urich applied for credit, he said.
"The thing that this thing illustrates is that it takes people years to develop a good credit rating and it can be ruined quickly," he said. "All it takes is some idiot keyboard operator."
Mrs. Urich said the problem is especially frustrating because she was brought up to believe that debts should be paid promptly. She said she feels ashamed and upset every time she is denied credit because of somebody else's bad debts.
A recent survey done by Consumers Union of 161 credit reports showed that 48 percent of them contained inaccurate information, with 19 percent containing "major inaccuracies."
Congressional hearings are scheduled to begin today on several proposals for reforming the credit-reporting industry.
Among key proposals in the bills are annual free credit reports for all consumers; harsh new penalties for banks, stores and other sources that supply wrong data to a credit file; authorization from consumers before the release of reports that aren't for credit, insurance, employment or licenses; and a ban on selling credit data to junk mailers.
In response to the call for new regulations, the credit-reporting industry is fighting back with its first-ever national consumer ad campaign and several measures designed to improve its public image.
Material from the Wall Street Journal was used in this report.