BANKRUPTCY UPDATES

• Minnesota Distillery of Fine Vodkas Files Chapter 7 Bankruptcy (February 10, 2012)
• Court Approves Newspaper Magnate Lee Enterprises’ Bankruptcy Plan (February 07, 2012)
• Suspected Felon Filed for Bankruptcy Shortly Before Untimely Death (February 09, 2012)
• Ireland Overhauls Bankruptcy Laws (February 06, 2012)
• IL State Representative Files for Chapter 13 Bankruptcy (February 08, 2012)

Most Credit Reports Contain Inaccuracies Despite Legal Protections for Consumers

1996 amendments to the Fair Credit Reporting Act aimed to increase the accuracy of consumer credit reports and the accountability of creditors who misreported information or failed to adequately investigate consumer disputes. However, a number of studies and surveys conducted in the wake of those reforms have demonstrated that a startling percentage of credit reports still contain mistakes or intentional omissions/misrepresentations, and that those inaccuracies are costing millions of American consumers money.

A 2002 study by the Consumer Federation of America (CFA) revealed that 29% of consumers had credit score variations of 50 points or more when their credit scores from the three major credit bureaus were compared. CFA estimated that this discrepancy placed approximately 8 million Americans at risk for erroneous assignment to high-risk lending pools, resulting in higher interest rates and fees.

In 2004, the U.S. Public Interest Research Group asked adults in thirty states to review their credit reports and respond to a survey. The survey results revealed astonishing numbers of errors and inaccuracies. For instance:

• 1/4 of all credit reports examined contained "serious errors", with serious errors defined as "errors that could result in the denial of credit"
• More than half of all credit reports examined contained inaccuracies in demographic information, including misspellings, outdated information, and information belonging to a different consumer
• Nearly 1/4 of all credit reports reviewed listed the same loan more than once
• Nearly 1/3 of credit reports listed closed accounts as open, including some that had been closed for years

Of the reports reviewed during the study, 19% contained at least one error, omission, or other inaccuracy. Some of the most common reasons for errors include:

• Sloppy reporting
• A time lag in reporting or updating
• Erroneous merging of the credit reports of two consumers with similar information
• Intentional omissions or misreporting intended to keep consumers "captive" with their current creditors
• Reporting of debts too old to collect or debts that have been discharged in bankruptcy in an attempt to pressure consumers to settle debts they no longer owe

If your credit report contains inaccuracies, the law provides specific procedures to help you resolve those discrepancies and recover the credit score you've earned. Every adult should review his credit report on a regular basis and take action to correct any inaccuracies. Even a seemingly trivial item might have a significant impact on your credit score, which could impact your bankruptcy.

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