A number of Brits have claimed to have noticed mistakes when checking their credit reports, a situation that could see millions of Brits turned down for credit or missing out on the best rates for financial products.
That is according to new research from price comparison and switching service uSwitch.com.
Over a third (38 per cent) of respondents that checked their report over the course of the last two years have uncovered mistakes, amounting to some five million customers.
Wrong name, product and address
Among the most common errors were having the wrong products listed, including credit cards (39 per cent), while other mistakes, such as the address (23 per cent) and the wrong name of the bank or company providing credit listed (18 per cent), on the report were also found to be problems.
However, the company claims that this could just be the tip of the iceberg, with an estimated 15 million consumers having never checked their credit report, meaning that a large number of Brits could be at risk of suffering from undiscovered credit report inaccuracies.
Indeed the information gathered within a credit report can prove crucial in deciding whether to offer someone a particular credit account or financial products.
What makes these latest findings all the more serious is the fact that even the slightest error could drag down a credit score and lead to credit being refused.
Millions being turned down
The research found that 12 million consumers (25 per cent) had either not been refused credit or had not received the rate the had originally applied for.
That has led a number of people to turn to more expensive forms of credit. Over a quarter (26 per cent) of people that had been refused credit were using payday lenders, while another 21 per cent were turning to pawn shops or cash for gold services.
A further fifth (20 per cent) would take out a credit card with a higher interest rate, while another 19 per cent use unsecured loans, again with a higher rate.
Personal debt still a problem
The findings come at a time when personal debt is still proving to be a problem all over the country, with recent estimates claiming that it could be costing the British economy as much as £8 billion a year in terms of damage done to family life, employment prospects, mental and physical health and costs to state services.
It also found that when consumers are turned down for financial credit, they are often unaware about how the most critical decisions are made, with only 38 per cent stating they were told the exact reasons for being refused credit.
Another 34 per cent said they had been refused credit were not given any explanation at all.
David Mann, head of money at uSwitch.com, says:“Credit report errors have a dramatic effect on our ability to access the best financial deals. If your report contains errors, you can quickly find yourself rejected for credit. As a result, the research shows many consumers are turning to more costly forms of obtaining credit and can end up with debt that’s difficult to manage.
“We perhaps place too much blind faith in credit reference agencies to maintain accurate data about us, when mistakes are almost inevitable. But the process to correct these errors is lengthy and complicated. The problem is further compounded by there being multiple credit agencies so the incorrect information held about us could be included in more than one report. This makes it harder for consumers to know where to turn."