WASHINGTON WATCH: Errors In Your Credit Report Can Cost You Money; Keep You From Getting A Job (VIDEO)

A recent study by the Federal Trade Commission revealed that, of those surveyed, 26 percent had at least one error on their credit report. Those errors can cost you money, destroy your ability to lease an apartment, or buy a home, or get that job you really want. Most people don’t check their credit reports and even when they do, they find it very difficult to get them changed.

If there is anyone who can help, it’s “Washington Post” financial columnist, Michelle Singletary.

MR. MARTIN:  Welcome back.

A recent study by the Federal Trade Commission revealed that, of those surveyed, 26 percent had at least one error on their credit report.  Those errors can cost you money, destroy your ability to lease an apartment, or buy a home, or get that job you really want.  Most people don’t check their credit reports and even when they do, they find it very difficult to get them changed.

If there is anyone who can help, it’s “Washington Post” financial columnist, Michelle Singletary.

Michelle, welcome back.


MR. MARTIN:  All right.

MS. SINGLETARY:  Thank you.

MR. MARTIN:  So, we’ve talked about the problems that we have.  I can’t stand these credit agencies.  Let’s just be honest.  You’re talking about Experian, TransUnion and Equifax.


MR. MARTIN:  And so you’ve written about this here, so the findings of the FTC – were they shocking to you?

MS. SINGLETARY:  They were shocking.  There were lots of consumer groups who for years have been saying that there[’re] a lot of errors in the credit reports.  There’s just a debate about what percentage.

MR. MARTIN:  Right.

MS. SINGLETARY:  But when you look at the millions of files that are out there, even a small percentage – like, 5 percent, I think, the report showed, had serious enough errors that would affect people’s ability to get the best credit.  Well, if you translate that into the number of people who have credit reports, that’s like 10 million people.  So, it’s most likely there’s somebody watching today has had an error in their report that they have [had] trouble fixing.

MR. MARTIN:  Now, how [do] the errors even get on there?  I mean so, how does it even take place?

MS. SINGLETARY:  Well, you know, the credit bureaus are basically information dumping grounds.  So –

MR. MARTIN:  Right.

MS. SINGLETARY:  — your creditor dumps information into their database, and they pull it all together.

MR. MARTIN:  So, for instance, you may have paid a bill off, but the –


MR. MARTIN:  — company keeps sending you bills; and all of a sudden, it goes to a credit collection person, and you’re going, “Wait a minute.  I already paid this thing.”

MS. SINGLETARY:  That’s exactly right.

It happened to me.  Some storage company said I hadn’t paid them.  Now, anybody who knows Michelle Singletary knows she pay her bills!

MR. MARTIN:  [Laughs.]

MS. SINGLETARY:  So, I’m like, “I know you ain’t talkin’ about me!”

So, it came to one of my credit reports.  And the reason … I know it affected it as much as 50 points on my credit was [with] that the other two bureaus that didn’t have that incorrect information, my score was much higher.  And so I didn’t really think about it until, you know, we were going to go for a house, and they’re like, “Well, what’s this?”

I was like, “Okay.  Now y’all need to fix this.”

So, I did what you’re supposed to do:  file a complaint –

MR. MARTIN:  How long did it take?

MS. SINGLETARY:  It took a couple months, but here’s what happened.  They removed it, and then the storage company reported it back again, and it appeared back on my credit reports.

And then I called again.  I said, “Now,” you know, “you folks, don’t let me get no Baltimore ugly on you.”

MR. MARTIN:  [Laughs.]

MS. SINGLETARY:  And so eventually, it got off of my credit report.

Now, I have really good credit, so even that margin didn’t affect my ability to get best credit; but if you’re on the margin –

MR. MARTIN:  Right.

MS. SINGLETARY:  — and you’re just barely making it –

MR. MARTIN:  Let’s say, you know, 580 or something –

MS. SINGLETARY:  — well, that’s really – that’s not on the margin.  That’s – [crosstalk] –

MR. MARTIN:  But what’s the margin?

MS. SINGLETARY:  — well, in the 600s.  In the 600s.

MR. MARTIN:  First of all, what’s the average credit score out there?  I mean –

MS. SINGLETARY:  Well, it’s – you know, the average – it depends on, you know, where you are; but a good credit is 700 or more.

MR. MARTIN:  — right, but a lot of folks –

MS. SINGLETARY:  An excellent –

MR. MARTIN:  — don’t have good credit scores.

MS. SINGLETARY:  — a lot of [people don’t] have –

MR. MARTIN: That’s why I said 580.

MS. SINGLETARY:  — yeah, well, 580 –

MR. MARTIN:  That is a real margin!

MS. SINGLETARY:  — [laughs] –

MR. MARTIN:  I’m being honest.  Michelle – her credit score’s not near that, but I’m the one who’s bein’ honest.

MS. SINGLETARY:  — yeah.  Well, I would say the high 600s is normally where most people are:  670, you know, up to 700.  If you’re over 700, you’re really golden.  750, they’re handin’ you money.  500s – you’re really having some issues there, but basically – so, let’s say you’re in the 600s, and you’re just short of that 700 or plus mark.  And you’ve got an error in your report?  That kicks you back to another tier of loans.

So, let’s say you wanted to qualify for the best loans – getting a car – but this error pushes you back to the next tier.  Your interest rate for that loan could go from, like, say 5 percent to as much as 10 percent; or, sometimes, depending on the car dealer.  So, it’s a big deal.  This is actually costing you money if there’s an error – for a lot of people.

MR. MARTIN:  Now, are the credit agencies legally obligated to remove the error?

MS. SINGLETARY:  Here’s what happens.  This is the problem.  They have to investigate.  Now, that’s the key word:  “investigate.”  What does that mean, exactly?

MR. MARTIN:  Right.

MS. SINGLETARY:  So, what a lot of consumers are basically finding – which is what … happened [with me] – [is] they went back to the person who gave them the bad information and said, “Is this right?”

And the person said, “Sure, it’s right!  She owe me money!”

And I figure that’s not an investigation!

And so that’s one of the issues the FTC has pointed out and the consumer groups – is that the consumer reporting agencies are not doing the best that they can to investigate, because all they’re [doing is] going back … to the person who gave the wrong information.

MR. MARTIN:  Well, here’s the fundamental problem that I have.  So, you have these credit agencies; and they are, frankly, determining your fate.  So, who has jurisdiction over them?  Who, frankly, governs them and forces them to do right?  It seems –


MR. MARTIN:  — as if they’re just sort of out there just doing whatever they want to.

MS. SINGLETARY:  Well, no.  I mean the FTC has some authority, because we have the Fair Credit Reporting Act, and we do have some federal rules that [say] what they have to do with this information, what they cannot do with this information.

MR. MARTIN:  Right.

MS. SINGLETARY:  So, if there’s an error, they have to investigate it.  There[’re] some sort of things like [that].  And also, the Consumer Financial Protection Bureau has now some authority over those, and they are stepping in to do more, and I hope – really, the area that we need [the] most help on is the investigation part of it.  How much investigation are they truly doing to make sure that when you say that there’s an error, that they help correct it?  Because going back to the person who gave the bad information is –

MR. MARTIN:  Right.

MS. SINGLETARY:  — not an investigation.

MR. MARTIN:  So, I remember something happened to me when – again, the tricks of the trade.  I get this phone call out of the blue, saying, “Hey, we picked up this debt, and you owe a bill from MCI” –


MR. MARTIN:  — “dating back to” –

MS. SINGLETARY:  [Chuckles.]

MR. MARTIN:  — “1999.”

And what’s interesting was this was around 2006.


MR. MARTIN:  And so what that told me was we were almost close to that seven-year –


MR. MARTIN:  — mark, because after seven years, stuff’s supposed to drop off.  Correct?

MS. SINGLETARY:  That’s right.

MR. MARTIN:  But what happens is when they report it again, that basically restarts the clock.  Correct?

MS. SINGLETARY:  It’s not supposed to restart the clock.  It can sometimes, but they’re not supposed to.  From the date … that you were delinquent on that debt, there’s a seven-year clock.  If they contact you close to that, they can’t reset that clock, and that’s why it’s important to pull your credit reports every year so that you have the evidence that, “Wait a minute.  This was on here back in X year.  You can’t re-age this debt.”  That’s what, sort of, they try to do.  And they threaten people with that!

MR. MARTIN:  [Crosstalk.]


MR. MARTIN:  This guy was amazing.  They told me — I said, “Well, I need proof of what you say I owe.”

“Well, we can’t give it to you.”

I said, “Oh, so you think I’m just going to just give you my credit card number right now and pay 400 bucks for something that you can’t even show me I even used.”

MS. SINGLETARY:  And that’s not true either.  They have to prove it.  If you ask for the proof, they have to show it to you, and you have to be – you know, be vigilant and say, “This is not my debt.  Where’s the proof?”  And they have to provide the proof.

And also, here’s the other thing.  Debt is being sold, and then some people pass away.  You’re not obligated to pay debt of someone who passed away.  That’s another trick of the trade.

MR. MARTIN:  Really?

MS. SINGLETARY:  Yeah.  Your mom passes away.  Your brother – this happened to my brother.  My brother died from epilepsy, and he had some debt – not a lot.  And they called me; and I was, you know, helping him.  They said, “Well, you need to pay his debt.”

And I was like, “You don’t” [chuckles] – “You are sadly mistaken.  I’m not his” – “This is not by debt.”

And they tried to, “Oh, well, don’t you want to do this?”

MR. MARTIN:  Right.

MS. SINGLETARY:  And they try to, you know, get you to pay it when you’re not obligated.

So, you[’ve] got to know your rights.  The FTC’s website is phenomenal in terms of all the information –

MR. MARTIN:  Ftc.gov?

MS. SINGLETARY:  — ftc.gov – Federal Trade Commission.  Just type in “credit reports FTC.”  It has a lot of information.  It’ll walk you through everything.

The important thing is know what’s in your credit report!  Every year, you ought to pull all three you ought to pull all three of your credit reports from annualcreditreport.com.  It’s the only official site

MR. MARTIN:  Allows you to get one for free – correct?

MS. SINGLETARY:  — for free.  Each credit report –

MR. MARTIN:  Annualcreditreport.com.

MS. SINGLETARY:  — every – yeah.

MR. MARTIN:  All right, Michelle.  We appreciate it.

MS. SINGLETARY:  You’re welcome!

MR. MARTIN:  Thanks a bunch.