The Consumer Financial Protection Bureau recently released a report citing an increase in complaints about consumers’ credit reports. We would like to be clear: for the credit reporting industry, responding to consumer complaints and getting credit reports right are paramount. The report claimed that more than 700,000 complaints submitted between January and September 2021 were attributed to the credit reporting industry, and the nationwide credit bureaus demonstrated an inability or unwillingness to address these complaints.
Getting credit reports right for consumers is our most important job. Consumers rely on their credit reports for big moments in life like buying a home or starting a small business, and it’s stressful to encounter any problem along the way. The national credit reporting agencies prioritize making it easy for consumers to identify and correct any errors on their credit reports.
Consumers, credit reporting agencies, banks and regulators all share one common goal when it comes to credit reports: they should be as accurate as possible. Credit reports are a ledger of consumers’ payment history and status of current credit accounts, and financial institutions are required to report accurate information to the credit bureaus to ensure what appears on a consumer’s credit reports is correct. Lenders use the information to make credit decisions, so there’s incentive for the credit bureaus and lenders to work hand-in-hand to achieve the highest level of accuracy possible.
However, if a consumer discovers a potential error, the credit reporting agencies work to resolve it in advance of the legally required 30-day timeframe. In fact, the majority of errors are resolved in less than 30 days.
By analyzing the disputes and complaint data, the industry continues to make dispute and complaint process enhancements to help consumers. Note two data points from the Oliver Wyman research firm:
- Just under 13% of the submissions to the complaint portal are classified as disputes by the CFPB resulting in any change to a consumer’s credit report. So, most of what comes to the CFPB are typos or other superficial errors, which do not impact a credit score. (Consumer Credit Reports, Aug. 2021, p. 16)
- 45% of these submissions appear to use a template, a sign that they are driven by credit repair companies, many operating to remove accurate, albeit negative, information from credit reports, which to be clear, no one can do. (CFPB Online Complaint Portal, Oct. 2021, p.5)
We previously detailed concerns about the CFPB’s complaint portal—the tool the agency provides for consumer complaints about credit reports.
Independent research, including the data from Oliver Wyman, suggests most of these “complaints” are really disputes about information in credit reports, rather than legitimate complaints about the credit bureaus or about the quality of products and services provided by the bureaus. Most of these disputes are being generated by some third-party credit repair organizations. Some credit repair organizations are simply scamming people out of hundreds of dollars a year on unattainable promises. We are committed to continuing to work with the FTC and CFPB to protect consumers against any harmful or abusive tactics.
The three national credit reporting agencies service over 200 million consumers a year. It’s a responsibility our industry doesn’t take lightly and we’re proud of the role we play in helping consumers achieve their goals and dreams. Our industry will continue to work diligently across the financial ecosystem to make sure all consumers are accurately represented through their credit report.