Why Aren’t Credit Bureaus More Careful in Vetting Your Records?

Last summer, Consumer Reports asked 5,858 volunteers to ask for their credit report and examine it for any errors. And more than one-third of them did indeed find at least one error on their credit report. And this wasn’t the only time Consumer Reports and others have found such damaging results. And those errors matter; many make people look like bigger credit risks than they actually are.

Common errors in reports include: a failure to update debts as having been paid off, mixed files (when the record included accounts or debt that did not belong to them), and wrong personal information (such as an incorrect address).

If you’ve found errors on your credit report or realize you have a mixed file, you may be wondering: Why are the credit monitors so bad at monitoring your credit? Why don’t they do a better job at vetting the information they receive?

Sources for Credit Reports

The three credit bureaus—Experian, Equifax, and TransUnion—use different sources for their credit reports, which is why your information may be different from one bureau to the other. But generally speaking, they draw data from public filings and court records (such as property ownership records and lawsuits), bank information, credit card companies,

According to a Brookings Institute report, credit bureau errors happen because of the “size, speed, and economic incentives of the system.” When it comes to size and speed, the bureaus maintain more than 200 million credit files, and each month, more than 1 billion pieces of data are updated. And a lot of the data is inaccurate when it comes to the bureaus. For example, there can be errors in the original bill, while debts sold to third-party collectors may not be updated, even when paid in full. And there’s just not enough money to incentivize those supplying the data to provide more accurate records.

Therefore, until the laws change, you—not the credit bureaus—are responsible for checking the accuracy of your credit report. But once you do find errors, you don’t have to fight the credit bureaus on your own. That’s why, if you identify any errors and negative information in your credit report, contact an attorney who specializes in representing clients like you—disputing the errors, repairing your record, and obtaining compensation.