New Report Finds U.S. Consumers Overlook Credit Reports

How frequently do you check your credit report? If you’re like most Americans, the answer is not frequently enough. According to a new report by the Consumer Financial Protection Bureau (CFPB), only one in five people actually obtain a copy of their credit report each year.

While most people who are considering a big-ticket purchase like a car or Oklahoma City home know, your credit score is vital to your ability to secure financing and also a more favorable interest rate on the loan. But according to the report, only about 44 million people actually reach out to the three largest credit reporting agencies each year, including  Experian, TransUnion, and Equifax, for a copy of their report. These agencies maintain credit files on approximately 200 million Americans.

The CFPB notes, “The most effective way for consumers to identify errors in their reports is to obtain copies and review them.” Many people’s reports contain errors that could negatively impact their ability to obtain a loan for the purchase of a home in Oklahoma City, but the only way to challenge these errors is to know about them.

The correlation between a good credit score and the ability to obtain a mortgage is quite clear. A recent Ellie Mae origination insight report, which represents 20% of all U.S. mortgage originations, found that the average FICO score for a closed loan in October of last year was 750, while the average denied loan had a score of 706.

Adds Richard Cordray, CFPB’s director,“Credit reports on a consumer’s financial history and behavior can determine eligibility for credit cards, car loans, and home mortgage loans – and they often affect how much a consumer is going to pay for that loan. The industry is critical in our economy. Without credit reporting, many consumers would likely be unable to get credit.”

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