Credit Report Errors Plague Consumers

November 17, 2017

WASHINGTON – Consumer credit reports continue to be riddled with tens of millions of errors annually, according to a new report released by U.S. Sen. Bill Nelson (D-FL), the top Democrat on the Senate Commerce Committee.

Between 2014 and 2016, consumers identified and disputed more than 224 million potential errors on their credit reports – a 60 percent increase during the three-year period.  Of those disputed items, more than half were confirmed errors and later fixed by U.S. credit reporting agencies (CRAs).

The figures came in response to a series of questions Nelson sent to the nation’s three largest CRAs - Equifax, Experian, and TransUnion -in an effort to assess the accuracy of information in credit reports and to better understand current dispute resolution practices. 

“There’s nothing more frustrating than discovering an error on your credit report, especially when it could result in being denied a loan, paying higher interest rates or even getting turned down for a job or an apartment,” said Nelson.  “Unfortunately for consumers, once they’ve found a mistake they have nowhere else to turn but the big three credit reporting agencies.  That’s why it’s imperative these companies do a better job of making it easier and faster for consumers to fix credit report errors.”

According to the Consumer Financial Protection Bureau (CFPB), credit reports were the third most-complained-about product behind debt collection and mortgages from July 2011 to March 2017.  Consumers submitted nearly 195,800 credit reporting complaints during the period.  CFPB complaint data also reveals that Equifax, Experian, and TransUnion are among the top five most-complained-about companies in the bureau’s monthly complaint reports ranging from February 2015 through January of this year.

The report made a number of recommendations aimed at improving the process for consumers to correct mistakes on their credit reports.  They include:

      • CRAs must make the dispute resolution process easier for consumers, establish better processes for the removal of inaccurate information, and take a tougher stance against furnishers that provide inaccurate information;

      • Consumers should regularly check their credit reports with all three major CRAs to determine whether their reports contain any of the tens of millions of errors discovered each year;

      • When a CRA fails to promptly correct an error in response to a dispute, consumers should file complaints with the Federal Trade Commission (FTC) and CFPB; and,

     • The FTC and the CFPB must continue their long-standing efforts to protect consumers and ensure that the CRAs are complying with the Fair Credit Reporting Act.