Today The Policy and Economic Research Council (PERC) released the findings of
a study that concluded that 95% of study participants are “satisfied” with the results
of their credit bureau dispute investigation process and that less than 1% of credit,
collections and public records were disputed. Further, they concluded that while 20% of
the study participant’s credit reports were disputed; most modifications were “minor or
inconsequential.”
PERC’s defensive press release seems to have been written knowing that the results
would be panned as being practically unbelievable. PERC, which claims to be non-
partisan”, is heavily funded by the credit industry including by all three of the credit
reporting agencies and their trade association. In fact, the study was funded by a grant
from the Consumer Data Industry Association (CDIA), the trade organization of the credit
reporting agencies with “invaluable assistance” from Equifax, Experian and TransUnion.
Further, PERC’s President has acted as an expert witness on behalf of TransUnion in
the past.
2,338 consumers agreed to participate in the PERC study, which represents .00001%
of the credit files in just one of the credit bureau’s database and .000004% of the 600
million files contained in the collective databases of the three national credit reporting
agencies. In contract, most credit score development samples represent 3% to 4% of
the credit bureaus’ databases.
Only 11% of the consumers invited to participate in PERC’s study agreed to do so.
And, only 4.1% of the invited consumers fully participated to the study’s conclusion.
This indicates a high probability of adverse selection in the sample, which was grossly
undersized to begin with.
The U.S Public Interest Research Group (PIRG) performed a study in 2004 that
concluded 25% of the survey participants’ credit reports contained “serious errors” and
that the errors did not belong to the consumer and 22% of the credit reports contained
the same mortgage loan twice. And finally, that 79% of the credit reports surveyed
contained some sort of error, serious or otherwise. The completely divergent results
seem to conclude that bias played a part in both studies and that the true percentage
and severity of credit report errors still remains elusive. A truly neutral party still hasn’t
performed a proper analysis.
“The Credit Guru”, Longtime FICO Insider & Credit Industry Authority President Of The Ulzheimer Group, LLC
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group, the Director of Credit Education at DisputeSuite.com, Credit Expert at CreditSesame.com and the credit blogger for Mint.com. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has served as a credit expert witness in more than 150 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit.
