Study Finds Credit Report Errors : Consumers: Inaccuracies were discovered in 48% of the files studied, affecting ratings, loans and jobs. Confidentiality is also found to be at risk.

The credit reports on file for millions of Americans often contain errors that could cost consumers a good credit rating, approval for housing or even a job, a study concluded Monday.

The study conducted by Consumers Union showed 48% of reports it reviewed from the country’s three major credit reporting firms contained at least one inaccuracy, and 19% contained a “major” error that could adversely affect a consumer’s eligibility for credit.

“A credit report can make or break your application for credit, housing, insurance and even a job,” said Michelle Meier, counsel for the consumer watchdog group.

“The high error rate we found indicates that lots of consumers may be at risk because of inaccurate credit reporting,” Meier said.

During the course of the study, one participant was denied credit based on inaccurate information that she was delinquent in paying a $19 balance on a department store credit card. In fact, Meier said, the woman had paid off the account and returned the card to the store five years earlier.

Another participant discovered information about her mother’s credit history erroneously included on her own credit report, including a large loan dating to when the daughter was 11 years old.

Meier said the CU study also raised a major concern about the confidentiality of about 400 million credit reports now on file for nearly 90% of Americans.

“We found that a full 27% of the participants . . . indicated that third parties had gotten access to their reports without their permission,” Meier said, adding another 27% reported that was “difficult to tell” by reading the reports if others had been given access.

“One of our participants reported back to us that when she received her report, another report, that of a stranger . . . was attached to her report,” Meier said.

The CU study involved 161 credit reports on file with the country’s three major credit reporting firms: Equifax, Trans Union and TRW Credit Data. Participants were primarily CU employees based in Washington, New York, San Francisco and Austin, Tex.

Meier said that although the study included a relatively small sampling, the findings mirror those of earlier reports and indicate continuing problems with both accuracy and confidentiality within the credit reporting industry.

Industry figures show that each year about 9 million consumers ask to see copies of their credit reports, and of these about 3 million request corrections, she said.

“One of the problems is we really don’t know how many consumers have inaccuracies in their reports because many don’t ever ask,” said Bill McGuire, author of a report on the study in the May issue of CU’s Consumer Reports magazine.

Meier said the cost of obtaining a copy of one’s credit report, often as high as $20, is prohibitive for many consumers, particularly if reports are on file at all of the “big three” firms.

While some states have placed a cap on the amount that can be charged their residents for copies, Meier said CU supports federal legislation that would allow consumers to obtain one free copy annually.

More importantly, she said, Congress needs to enact laws that would help ensure the accuracy and privacy of credit reports.

“Congress has to get the credit reporting industry to clean up their files,” she said.