Another big reason why the Credit Bureaus love keeping credit reports filed with errors is also because they actually charge lenders more money for data that is tied to individuals with lower credit scores. Lower scores means higher interest rates. Car dealerships, credit cards, insurance, you name it-all costs more when your credit is worse off because you are technically a higher risk with the current “Risk Based Pricing” system in place today.
As a result of this, the Credit Bureaus, want a bigger cut for things they know their vendors are also charging more for. So any time this bad credit data is requested, it comes at a higher price. The banks and lenders love it because they know they can charge you a much higher interest rate on an auto loan because you have a 580 credit score, when in actuality you probably should have a 620, but because of the errors on your report your score does not reflect that. They end up with a much higher probability of you paying your bill because you are more responsible than your credit score deems you to be, but they still enjoy the rich rewards of a much higher interest rate because your score still shows a 580! So again, more errors = higher returns with lower risks.
The above information was provided by Credit 360 Consulting. For more helpful information and how to improve your credit, click on Credit 360 Consulting.