(USA Today) -- Consumers may have trouble getting a bank loan or home mortgage because of errors in their credit report.
The Federal Trade Commission reported today that 5.2% of consumers had errors on one of the three major credit reports that could result in less favorable loan terms.
Results of the study make it clear that consumers need to check their credit reports regularly, especially if they plan to apply for a mortgage or auto loan.
"If they don't, they are putting their pocketbooks at risk," says Howard Shelanski, director of the FTC's Bureau of Economics.
Based on credit reports provided by three major agencies, the FTC numbers suggests that tens of millions of credit reports could have errors, says John Ulzheimer, president of consumer education at SmartCredit.com. That would include significant and insignificant mistakes. That is troubling because it increases the likelihood that any one individual has an error, he says.
Although 21% of participants in the FTC study found inaccuracies in their credit reports, it says the impact was generally modest or had no impact. But for a small number of consumers, the errors can have a serious impact.
There have been other studies of credit reporting errors, but they were funded by a consumer group or the credit industry. This study stands out because it was mandated by federal law, and the FTC doesn't represent consumers or credit reporting agencies.
But both consumer groups and credit agencies responded positively to the FTC findings. "We think that they tell an accurate story," says Denise Norgle, vice president of government relations at TransUnion.
And Consumers Union said the findings underscore that consumers should have the same information lenders have when making decisions about their credit.
If consumers find an error, they should dispute the information with the credit reporting agency by phone or online.
One in five of consumers had an error that was corrected by the reporting agency after it was disputed, according to the FTC report. And 206 out of 262 consumers who filed a dispute had some type of change.
But too many consumers don't even know if their report is accurate.
It has been reported that about 96% of free credit reports are never claimed. "We have to become more engaged with our own credit reports," Ulzheimer says. "We can't assume that everyone is getting it right all of the time."
Individuals can get a free credit report once every 12 months by going to freecreditreport.gov.