Credit reports represent personal data records compiled by credit reference agencies (CRAs) to determine your trustworthiness as a borrower. The most prominent bureaus are TransUnion, Equifax, and Experian.
While reliable in their findings, these entities are not infallible. Credit scores can be based on incorrect or outdated information that results in rejections for loans or a higher than necessary mortgage or motor vehicle interest rate.
Recent analysis from the Consumer Financial Protection Bureau (CFPB) falls woefully short in proper responses to consumers reporting credit report errors. A large part of the problem is the lack of competition that results in a lack of incentive to ensure their customers receive fair treatment.
From January 2020 to September 2021, the CFPB received more than 700,000 complaints about the “Big Three.” Overall, those cases represented more than 50 percent of all grievances they received during that period.
Both Equifax and TransUnion promised to investigate disputes and send findings to consumers. However, the bureaus failed to relay any information to the CFPB. Experian was the one agency that provided information considered substantive in their responses to complaints.
Even though they have 60 calendar days to respond, all three took a template approach instead of personally drafting correspondence based on consumers’ specific complaints.
Their cookie-cutter processes combined with their lack of action may be in violation of the Fair Credit Reporting Act for their failure to meet statutory obligations under the FRCA. These three bureaus are required to review complaints that involve consumers trying to find resolution and report the results of their reviews and any actions taken.
The stakes are high when it comes to inaccuracies in a credit report. Proactive steps in routinely reviewing the data are paramount.