The Consumer Financial Protection Bureau (CFPB) is required to gather information relating to the credit reporting industry and submit an annual report to Congress about its findings. In years past, the CFPB included this information in another larger report. But the number of complaints against Experian, TransUnion, and Equifax—the national credit reporting agencies (NCRAs)—skyrocketed in 2020. Roughly three times the number of consumers complained about each NCRA in 2020 than in 2019. Therefore, this year, the CFPB created a separate report about problems with NCRAs.
Since credit reports impact American consumers’ lives, we also take a closer look at these problems.
NCRAs collect information about consumers from “furnishers,” They then analyze this data to issue a credit report and score for each tracked consumer. NCRAs collect:
- Personal information, such as current and former addresses
- “Tradeline information,” information about credit accounts
- Public record information, e.g., bankruptcy filings
- Collections reported by debt collection agencies
- Inquiries by companies to review consumers’ records
If a report contains another person’s information or other errors, a consumer can dispute the incorrect facts.
When filing a complaint with the CFPB, consumers provide information such as:
- Identification of the credit reporting product at issue (e.g., a credit report or background check)
- Identification of the problem (e.g., Improper use of a report; incorrect information in the report; and inability to get a credit report)
- Identification of the steps they’ve taken to resolve the report
The bureau then forwards the complaint to the NCRA.
NCRAs must reasonably investigate a consumer’s complaint. However, NCRAs don’t have to investigate frivolous or irrelevant complaints. And they’re dismissing thousands of complaints for those very reasons.
In our next post, we’ll explain why this is occurring and what’s a solution for individual consumers.
Read part 2 by clicking here!