Issues with your credit history aren’t just a paper headache. They can result in lower credit scores, which in turn can affect the cost of a loan and other financial issues.
The CFPB compiles complaints in areas such as credit reporting, debt collection, mortgage lending and student loan servicing. In 2022, it published 800,394 consumer complaints, 61 percent more than the previous year.
“I’ve been in constant dispute with the credit bureaus for almost a year now and have yet to get … the inaccurate accounts on my credit report removed,” one consumer wrote to the CFPB in June, adding: “I feel like I am being taken advantage of and have been throughout this whole situation. I’ve been getting ignored for months on top of months and it is leaving me no other choice but to take these matters to court if the issue doesn’t get resolved.”
Digging a little deeper, complaints about Experian spiked 334 percent, PIRG found. TransUnion followed at 183 percent, then Equifax at 24 percent.
In its own report released in January, the CFPB took aim at bureaus’ responses to consumer complaints. The Fair Credit Reporting Act requires the federal agency to submit an annual report about complaints against the three largest nationwide consumer reporting agencies.
“We will be exploring new rules to ensure that they are following the law, rather than cutting corners to fuel their profit model,” CFPB Director Rohit Chopra said when he report was released.
If you’ve ever had to fix a credit report error, you know how aggravating it can be.
The credit bureau will send an inquiry to the company that reported the incorrect data. The creditor or “data furnisher” is supposed to examine its records but, without a thorough investigation, might resubmit the same erroneous information to the bureau. The credit bureau then punts back to you, indicating what came back was verified as accurate.
This blame game can go on for months or years in some cases.
Even if consumers are able to get errors corrected, if a creditor’s information system isn’t updated, a routine data dump to the credit bureaus could mistakenly migrate the mistake back into their files. Or, consumers can fix a problem at one bureau but have difficulty correcting the same information at another credit reporting agency.
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In response to the PIRG report, the Consumer Data Industry Association pointed out that the three major bureaus have all created online dispute centers for consumers to streamline the process.
“Our industry continues to evolve policies and procedures with the best interests of consumers in mind,” the industry group said in an emailed statement.
The credit bureaus blame the rise in complaints on credit repair organizations.
“Certain credit repair companies falsely promise consumers they can remove negative, but accurate information from their credit report and drive activity which inflates complaint numbers and undermines the process of addressing legitimate requests,” the association said.
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This explanation didn’t fly with the CFPB, which dinged the bureaus for not providing substantive responses to consumers’ complaints if they suspected the involvement of a debt repair company.
To their credit — pun intended — the bureaus have been more responsive.
The agency said Equifax, Experian and TransUnion are issuing “more substantive responses” when consumers complain.
One thing is for sure, having CFPB oversight makes a difference, said Mike Litt, consumer campaign director for the U.S. PIRG Education Fund.
“The relief that consumers have been receiving when they file a complaint against the credit bureaus has increased significantly,” Litt said. “What you see in the 2022 data is that the credit bureaus have taken more time to handle disputes.”
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If you’ve tried but failed to get a credit bureau to remove erroneous information from your credit file or investigate another issue, you’re more likely to get a response if you file a complaint with the CFPB at consumerfinance.gov/complaint. You can also submit your grievance over the phone at (855) 411-2372. The number is (855) 729-2372 for TTY/TDD.
In a second report released Thursday, PIRG rightly argues that the CFPB is doing exactly what it was created to do — have the consumer’s back, from ordering Wells Fargo to pay a record $3.7 billion for its misdeeds with loans and customer accounts to launching an attack on bank ‘junk fees’ to handling a record number of consumer complaints.
The report is intended to have the CFPB’s back highlighting its achievements. Since the independent agency opened its doors in 2011, Republican lawmakers have sought to weaken the consumer watchdog. This year, the Supreme Court took up a challenge to the structure of the CFPB.
“The CFPB is the most pro-consumer federal agency,” Litt said. “And it really shows that there is a lot at stake with all of these attacks against it.”