ONE FIFTH of consumers have found an error in their credit report, including an incorrect address, a false record of missed payments, or a credit product that was fraudulently taken out in their name, research claims.
However, 22 per cent of those who spotted an error took no action to correct it, even though it may have impacted their ability to seek credit.
According to a new survey from consumer watchdog Which?, there is still widespread confusion among consumers when it comes to their credit reports. Four in ten people have never checked their reports, while a third believe that checking their credit report frequently will have an adverse effect on their score.
79 per cent of those surveyed mistakenly thought that a credit blacklist exists, where you can be banned from borrowing if your credit score is too low.
Which? has urged lenders to be more transparent about their credit checking process, and to educate borrowers about how to manage their own credit reports.
“Credit reports help to give people more clarity over their financial health,” said Jenny Ross, editor of Which? Money. “However, our findings suggest that many are still in the dark about how their reports are compiled and used, potentially harming their ability to access credit in the future.
“Credit reference agencies and lenders must work harder to demystify the world of credit reports and scores – for example, by giving clear and constructive advice if an application is rejected, so prospective borrowers can take steps to improve their chances of being accepted in the future.”
The survey was carried out ahead of a Financial Conduct Authority review into the credit information market, which will focus on issues including how easily credit information is understood by consumers and how it impacts on their financial behaviour.