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Credit report mix-ups can cause extreme hardships on consumers

Credit card debt can turn your life upside down. Unfortunately, mistakes made by credit agencies can do the same. When consumers request credit reports they are asked for information including name, social security number, birth date and address. However, when creditors ask for reports, an exact match is not necessary. Credit report errors can cause extreme hardships for individuals in Alabama and nationwide.

Consumer files have not only been mixed with strangers sharing the same name but also with relatives including mothers, fathers, brothers, sisters, and in-laws. When files are mistakenly mixed, the consequences can be devastating.

During a 30-month period beginning in 2009, about six percent of close to 21,500 consumers who complained to the federal Trade commission, and almost eight percent who complained to the state attorneys general, said their credit reports had been mixed up with someone else's. The mix-ups include people who were unable to obtain loans to do necessary work on their houses, people who were being harassed by creditors, and consumers who lost out on credit cards, home and car loans, jobs, and the financing necessary to help their kids pay for college.

Tighter standards have been requested to decrease the number of identity mistakes taking place. The FTC has admitted that the mismatching errors are costly to consumers. However, the commission ruled against requiring crediting agencies to use stricter matching criteria in 2004. The agency decided that protecting lenders' interests was more important and that tighter standards could increase cases in which creditors request reports and no data is found. It doesn't appear that requirements will change anytime soon. Consumers are encouraged to request a free credit report annually.

Source: The Columbus Dispatch, "Dispatch Investigation | Credit Scars: Mixed and marred," Mike Wagner and Jill Riepenhoff, May 7, 2012

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