Credit reports are ripe with errors, according to the Federal Trade Commission (FTC), which conducted a study (pdf) of the U.S. credit reporting industry.

The FTC found that about 20% of consumers have an error on at least one of their three credit reports. The consumer credit rating business is dominated by three players: Experian, Equifax and TransUnion.

Federal regulators also found that 5% of consumers have credit-report errors that could result in them having to pay more for financial products, such as auto loans and insurance.

The FTC figures mean that tens of millions of credit reports may have errors, both significant and insignificant, according to John Ulzheimer, president of SmartCredit.com’s consumer education division. This increases the odds that any single person may have an error on one of their reports, he said.

“These are eye-opening numbers for American consumers,” Howard Shelanski, director of the FTC’s Bureau of Economics, said in a press release.  “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”

-Noel Brinkerhoff

To Learn More:

In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans (Federal Trade Commission)

Why Consumers’ Credit Reports Contain Errors (by Daniel Gross, Daily Beast)

FTC: Credit Reports May Have Significant Error (by Christine Dugas, USA Today)

40 Million Mistakes: Is Your Credit Report Accurate? (CBS News)

Report to Congress Under Section 319 of the Fair and Accurate Credit Transactions Act of 2003(Federal Trade Commission) (pdf)

FTC Attacks Fake “Free Credit Report” Ads (by Noel Brinkerhoff, AllGov)

Private Database of One-Third of U.S. Adults Sold to Debt Collectors and Banks (by Noel Brinkerhoff, AllGov)