Something’s not adding up.
During the pandemic, consumer credit has held up very well, and household debt has gone down. Credit card balances have gone down even for people who have lost jobs or been hurt financially in other ways because of the recession.
Consumer Reports says, though, that Americans are on track to set a record this year for the number of complaints about credit report inaccuracies that they send to the Consumer Financial Protection Bureau.
In 2020 and 2021, a non-profit consumer advocacy group found that a little more than half of the complaints sent to the federal agency were about credit score errors and concerns.
But in the first half of this year, three-quarters of all complaints were about credit report errors.
“Mistakes on credit reports are all too common and can have serious consequences, especially for those who are already struggling to make ends meet,” Consumer Reports policy analyst Syed Ejaz said in a statement. “No one should have to pay to access their own financial information.”
Consumer Reports asked the three biggest credit bureaus, Equifax, Experian, and TransUnion, to do something to make sure that people’s credit reports are correct.
It said that one way to do this is for the major credit bureaus to stop making people pay for their reports.
Equifax and TransUnion charge between $20 and $30 per month for unlimited access to personal credit reports. The reports from Experian are free.
Under the Fair and Accurate Credit Transactions Act, consumers can get a free, full credit report once a year at the website annualcreditreport.com.
Experian and TransUnion charge people to look at their reports more than once.
Free Access To Your Credit Report
In a letter to the credit bureaus, Ejaz said that seeing your credit report once a year isn’t enough.
He argued that consumers need to be able to get their reports at any time and for free so they can quickly find mistakes and dispute them.
“Consumers should be able to get a free copy of their credit report at any time and as often as they need to,” Ejaz said.
Companies use credit scores for employment decisions, landlords use them to decide whether to rent to someone, and insurance companies use them to determine how much to charge.
So, Ejaz said, the bureaus shouldn’t hide credit score concerns behind a paywall.
A few months ago, Equifax accidentally sent hundreds of thousands of Americans the wrong credit score.
This is why people are now pushing for everyone’s free access to credit reports.
A group of people is now suing Equifax in a class action lawsuit because of the credit scores sent out from March 17 to April 6.
Federal lawmakers have also asked Equifax to explain how the mistake happened and how customers will be compensated for it.
Ejaz wrote in a letter that credit bureaus can improve accuracy in addition to offering the complete credit report for free reports by:
- Don’t prevent consumers from seeing their credit reports if they can’t answer identity questions about who they are.
- Before putting something on someone’s credit report, double-check their full name, date of birth, and Social Security number;
- Letting a customer file a consumer dispute into a previous claim of inaccuracy;
Consumer Reports has started an online petition to make it clear that credit reports should always be free.
In the past few years, inaccurate credit reports have become a growing national problem. Many people say it’s hard to get Equifax, Experian, or TransUnion to remove mistakes from their files.
A study by the CFPB found that the three credit bureaus fixed less than 2% of the credit report complaints they got in 2021.
This is a significant drop from the 25% they fixed in 2019.
Consumer Reports said that between 2018 and 2021, the number of people who complained to the CFPB that their credit reports were wrong more than doubled.
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