newjerseynewsroom.com

BY PAUL SISOLAK

While New Jerseyans can still take heart that the average statewide FICO ranking, according to a recent national survey holds at a healthy 680 (second highest in the U.S.), local residents shouldn't forget to check their own credit reports for errors, mistakes and other overlooked problems that could negatively affect their own credit scores.

Credit reports are not the perfect examples of accuracy we may think they are -- according to an advocacy watchdog group, four in five credit reports contain egregious errors.

Several studies by the National Association of State Public Interest Research Groups have revealed that over 79 percent of all credit reports contain at least one type of erroneous flaw, and one quarter of those contain mistakes so serious that an individual's credit line could be ruined beyond repair. What's worse, the PIRG has contended, is that consumers are not often aware of these errors and find themselves perplexed when banks, credit unions and other lenders deny them lines of credit.

Combined with typographical mistakes, clerical oversights, outdated info, or worse yet, crimes like identity theft, many modern consumers aren't well informed over what a credit report entails -- a detailed list of one's borrowing and payment history -- and why they should pay more attention to it and avoid hurting their credit score.

For more financial advice, check out our Personal Finance Page.

Numbers Can Lie

A recent study by the PIRG contended that mistakes in credit reporting abound, often to the detriment of the consumer. Among them, 54 percent included incorrect personal details, like inaccurate birth dates, addresses or Social Security numbers. Thirty percent, according to the study, listed closed credit accounts as remaining open and overdue.

22 percent of credit reports were documented as listing some loans twice -- giving the appearance of making a consumer owe twice as much money. And 8 percent of reports didn't list major loans or lines of credit that have been paid off to show a consumer's borrowing reliability.

Identity Theft

Current U.S. Census data, through the Consumer Sentinel Network, notes that 6,807 New Jersey residents claimed they were victims of identity fraud in 2010. The Washington Post reported last year that nationwide losses stemming from identity theft fell in 2010 to $37 billion, down from $56 billion in 2009, but the news isn't exactly optimistic.

Many people are not aware until it's too late that their credit card or Social Security numbers have been stolen, their personal information hacked and a thief gone on a spending spree through their bank accounts.

Although the 2006 state Identity Theft Protection Act provides some protection, consumers still bear the brunt of resolving the problem with law enforcement and creditors.

There are a myriad of reasons why we should be paying more attention to our credit reports.