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Credit Report Accuracy and Access to Credit

Short summary:
Access to a Free Credit Report: A Legal and Economic Analysis .... free credit report from a creditreporting agency and that ...

Long summary:
Credit Report Accuracy and Access to CreditPage 1Credit Report Accuracy and Access to CreditRobert B. Avery Paul S. Calem and Glenn B. Cannerof the Boards Division of Research and Statisticsprepared this article. Shannon C. Mok providedresearch assistance.Information that creditreporting agencies maintainon consumers creditrelated experiences plays a central role in U.S. credit markets. Creditors considersuch data a primary factor when they monitor thecredit circumstances of current customers and evaluate the creditworthiness of prospective borrowers.Analysts widely agree that the data enable domesticconsumer credit markets to function more efficientlyand at lower cost than would otherwise be possible.Despite the great benefits of the current systemhowever some analysts have raised concerns aboutthe accuracy completeness timeliness and consistency of consumer credit records and about the effectsof data limitations on the availability and cost ofcredit. These concerns have grown as creditors havebegun to rely more on credit history scores (statistical characterizations of an individuals creditworthiness based exclusively on credit record information)and less on laborintensive reviews of the detailedinformation in credit reports. Moreover decisionmakers in areas unrelated to consumer credit including employment screening and underwriting of property and casualty insurance increasingly depend oncredit records as studies have shown that suchrecords have predictive value.A previous article in this publication examinedin detail the credit records of a large nationallyrepresentative sample of individuals as of June 301999.1That analysis revealed the breadth and depthof the information in credit records. It also foundhowever that key aspects of the data may be ambiguous duplicative or incomplete and that such limitations have the potential to harm or to benefitconsumers.Although the earlier analysis contributed to thedebate about the quality of the information in creditreco ...

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