Category Archives: Credit Reports

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, Debt Collection and Harassment, Identity Theft, News

How Debt Collectors Furnish Data to Credit Bureaus (Part Two)

Posted on by Credit Report Law Group

If you haven’t yet, read part 1!

Though tradelines—reports of outstanding debts—can considerably impact a consumer’s credit report and credit score, a report by the Consumer Financial Protection Bureau (CFPB) reveals that debt collection reporting is uneven and suspect. Updating the information on a credit report often does not depend on the debt resolution. Instead, it depends on which debt collector holds the debt.

As we detailed in our last post, debt collectors differ in who reports, but they also vary in their frequency of updating tradelines. Consumers may pay the debt in full, but it can be months or years before the debt collector reports this to the credit bureaus.

Astonishingly, CFPB concluded that debt collectors only report about 4% of the debts that are paid in full, so most debts that go to collection will remain on debtors’ credit reports indefinitely—regardless of whether or not the consumers have paid the amount in full.

Problems also arise when more than one collection agency has pursued repayment. If that’s the case, one debt collector may harass a consumer for non-payment, not believing the consumer’s assertions that they’ve already satisfied the debt, although another has received payment. They didn’t bother updating the credit bureau or the original vendor.

Having successive debt collectors pursue a debt complicates correcting a report when the original vendor or the debt collector misidentifies the debtor.

These uneven and inconsistent practices also make it more complicated to remove a mixed file from a report.

And the CFPB believes that when consumers complain about tradelines errantly on their credit report, most debt collectors fail to conduct the required investigations to clear someone’s name.

That’s why you shouldn’t rely on a debt collector to fix the error if you have problems with your credit report. Instead, you should contact an attorney whose specialty is representing clients like you—a lawyer who understands how debt collectors operate and can help you repair your record and obtain compensation for any damages you sustained.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, Debt Collection and Harassment, Identity Theft, News

How Debt Collectors Furnish Data to Credit Bureaus (Part One)

Posted on by Credit Report Law Group

According to a report by the Consumer Financial Protection Bureau (CFPB), debt collectors provide vast amounts of data to the three national credit bureaus—Experian, Equifax, and TransUnion. The bureaus then use the debt collectors’ data in calculating the credit reports (and credit scores) of 220 million consumers. And concerningly, the CFPB has identified critical issues with this data collection—points that every consumer should be aware of.

There are an estimated 7,000 debt collection agencies in the United States, with an annual industry revenue of $13.4 billion. And they’re contacting about one-third of the consumers with a credit file and at least one outstanding debt each year. But only 1,400 of these companies report the debts they hold to the credit bureaus, and there is a significant disparity in their reporting.

Ten companies are responsible for 22% of all debt-related items (known in the industry as “tradelines”) that appear on consumers’ credit reports. But it depends on the type of debt the firms pursue.

For instance, more companies report on medical debt than in other industries. The CFPB analysis found that the top ten companies that furnish medical debt only provide 18% of tradelines, so 82% come from the rest of the companies. By contrast, for debts relating to cable, cellular, and wireless bills, the top ten companies reporting on those debts make up 83% of those tradelines.

Consumers with medical debt are more likely to have multiple tradelines on their credit reports. In contrast, those with other types of debt may escape unnoticed—simply because those industry’s debt collectors are less likely to report on the debt.

This industry fragmentation means that different types of debt can result in different consumer problems. For example, medical debt is usually for smaller amounts than other categories of debt, but the vendors send medical debts to collections faster than other types of debt. Thus those with medical debts may seem like more significant credit risks because these debts are faster to show up as delinquent and have moved to collection. (These are some reasons why the credit bureaus have pledged to reduce the use of medical debt in their reports.)

In our next post, we’ll look at what happens to a negative tradeline after a consumer pays the debt collector what they owe. (Spoiler Alert: Nothing. Nothing happens.)

Click here to read part 2!

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Deceptive Acts and Practices, News

Incidence and Types of Collection Tradelines on Credit Reports

Posted on by Credit Report Law Group

Many consumers don’t even know what a “collection tradeline” is, but the reality is that collection tradelines may impact your life daily. A “collection tradeline” is the term for when a creditor or collection agency report of a delinquent debt appears on your credit report. Having a collections tradeline on your report influences your credit score—which in turn impacts the amount you’ll pay for loans, your ability to get credit cards and loans, and more. In some cases, it can even affect your ability to get a job.

According to a report by the Consumer Financial Protection Bureau (CFPB), 220 million consumers have credit files maintained by the three largest credit bureaus, Experian, Equifax, and Trans Union. Of those consumers, one-third have collection tradelines included in their credit files. And the majority of them have more than one collection tradeline on their report. The median consumer has 4.5 of them in their file.

Looking at credit reports, the CFPB concluded that most collection tradelines relate to fairly small debts. The median amount owed is just $271—an amount that’s large when you can’t pay it but not so large that it should damage someone’s credit for years, which can happen.

Additionally, the CFPB revealed that medical debt is the most common type of debt included in a collections tradeline. More than half of all collection tradelines are medical debt. And those with medical debt seem to be qualitatively different than those with other types of collections tradelines. For example, the medical debtor has fewer collection items, and, on average, they owe $579. By contrast, someone with a car-related debt usually owes almost ten times as much ($5,587).

In light of the disparity in medical debt reporting, the credit bureaus recently announced that they’d be revising their inclusion of medical debt in future reports.

The lesson here is that it’s essential to monitor your credit file for anything that can harm your credit—from collections harassment to mixed files or identity theft.

If you have problems with your credit report, don’t wait. Contact an attorney who specializes in representing clients like you—a lawyer who can help you repair your record and obtain compensation for any damages you sustained.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores

Understanding Section 611(e) of the Fair Credit Reporting Act

Posted on by Credit Report Law Group

If you’re one of the hundreds of thousands of American consumers frustrated by problems with their credit reports—maintained by one of the nation’s three largest credit bureaus, Experian, Equifax, and TransUnion—you may wonder if there’s anything you can do. But there are ways to repair your credit. Let’s briefly look at one such tool: Section 611(e) of the Fair Credit Reporting Act (FCRA).

Under FCRA’s section 611(e), the Consumer Financial Protection Bureau (CFPB) collect complaints from consumers who have issues with their credit reports. If a consumer says they’ve already tried to fix the problem on their own, that is a “covered complaint” (i.e., it is covered under the law), and CFPB must forward covered complaints to the bureaus.

Once CFPB has forwarded a complaint to a credit bureau, the credit bureau must confirm that it has fulfilled all of the statutory requirements relating to the consumer’s record. Then the bureau reports its findings back to the CFPB. Since the bureau cannot ignore the complaint and must examine the file, a report to CFPB is effectively a way to escalate a consumer’s complaint.

More than 80% of all complaints received by CFPB are covered complaints. And the FRCA also requires the CFPB to compile an annual report analyzing these complaints to see if it can identify any trends within the bureaus’ practices.

Crucially, for each covered complaint, CFPB asks the bureau to confirm whether the consumer really did previously submit a dispute directly to the bureau. And through CFPB’s recent analysis of its received complaints, CFPB did indeed make a major discovery: The bureaus confirmed that they had received consumers’ disputes—but many of the complaints had come from “credit repair agencies.” The bureaus consider these complaints unreliable, so they disregard them and don’t take any action.

That’s why you need a credit attorney to help you. With an attorney preparing your complaint, it’s more likely that the bureaus will take action to correct your file. And if they don’t, a lawyer can help you obtain compensation for any damages you sustained.

If you have problems with your credit report, contact an attorney who specializes in representing clients like you. Don’t wait. Call today.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Credit Scores, Debt Collection and Harassment, Legislation, Mixed Case File, News

Common Customer Complaints about Credit Reporting Bureaus (Part 2)

Posted on by Credit Report Law Group

In our last post (click here to read part 1), we looked at the dramatic increase in consumers’ complaints against the national credit bureaus, Experian, Equifax, and TransUnion. But, of course, we need to do more than know the number of complaints we need to pay attention to. We also want to examine the types of problems that consumers are reporting.

Consumers’ most common complaint is that there is wrong information—information about another person—on their credit reports. While this has been a frequent complaint for years, the number of such complaints has risen. Consumers complained about this more than 400,000 times in 2020.

While incorrect information on a report can be the result of a “mixed file,” when two people’s files are combined (often because they share a common name), in 2020, most people said they were victims of identity theft, and that was the reason for the incorrect information. This isn’t surprising, given the rise of identity theft-related crime. Still, it’s a particular concern because, according to the Consumer Financial Protection Bureau, victims of identity theft frequently deal with its repercussions long after the crime occurred. Ten percent still have related problems even a year after the fact.

Other common complaints include:

  • incorrect account status (e.g., debt is not shown as paid off)
  • personal information is incorrect
  • the credit bureau’s investigation did not resolve an error on a report
  • the credit bureau did not notify the consumer of the investigation’s result
  • the credit bureau investigation was not completed within 30 days

The bottom line is that if you’re having problems with your credit report and have unsuccessfully tried to resolve the situation, you’re not alone. So don’t wait. Contact an attorney who represents clients like you—a lawyer who can help you repair your record and obtain compensation for any damages you sustained.

Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Debt Collection and Harassment, Legislation, Mixed Case File, News

Common Customer Complaints about Credit Reporting Bureaus (Part 1)

Posted on by Credit Report Law Group

By law, the Consumer Financial Protection Bureau (CFPB) issues an annual report analyzing consumers’ complaints made to CFPB. The number of complaints has exploded in recent years, and it’s just a tiny fraction of the complaints made directly to the relevant companies. And it’s worth looking at some of the findings relating to those complaints. Once you are familiar with problems other consumers are facing, you may be able to better understand the issues that you are dealing with.

Most complaints the CFPB receives are related to the three major credit bureaus, Experian, Equifax, and TransUnion. The number of complaints against each firm has roughly tripled since 2019, and, in a year-by-year comparison, the growth of the complaints against each firm is very similar. Equifax had somewhat fewer complaints than Experian and TransUnion, but it, too, still had a tripling of complaints in the past couple of years.

More consumers now report having more problems with credit reporting than they are with debt collection. That’s a significant change. When the CFPB first began collecting complaints in 2011, debt collection was the most common cause of complaints, and, for years, there were 100,000 more complaints about debt collectors than there were about other financial service providers. Issues with debt collection still occur, but now, there are twice as many complaints against credit bureaus than debt collectors.

And there’s more for them to complain about. In 2020, consumers told the CFPB that they had multiple problems with credit bureaus. And 50% of them had filed previous complaints that were still unresolved.

Another noteworthy trend: There has also been an annual increase in complaints against “furnishers,” the companies that supply data to the credit bureaus. While still far below the number of complaints against the credit bureaus, the volume of complaints against furnishers has doubled since 2017. At this point, consumers are complaining about furnishers more than they are about their credit card providers or other bankers.

In our next post, we’ll examine the issues those consumers are complaining about. . .

Read part 2 by clicking here!

Credit Report Errors, Credit Reports, Credit Scores, Identity Theft, News

Data Breaches and Protecting Against Identity Theft

Posted on by Credit Report Law Group

On August 17th 2021 the mobile phone company T-Mobile revealed that they had discovered a cyberattack had exposed certain personal information of around 7.8 million current customers, and information about around 40 million former customers to bad actors.

The data included names, dates of birth, social security, and driver’s license or identification information. Financial, credit card, and payment information however was not a part of this breach.

Large-scale data breaches have become all too common and frequent in an internet-focused world where nearly every individual creates personal accounts and provides information to numerous companies, both large and small. What effect can these breaches have on your credit identity and credit score and how can you protect yourself?

Risks of Data Breaches

Data breaches occur when hackers or internet “phishers” gain unauthorized access to private data through technological attacks or social engineering. For example, a bad actor could email an administrator of customer information pretending to be a manager at a company in order to log into that company’s online systems or gather confidential information. The risk that this creates for individuals is that the stolen data can then be sold in places like the dark web so that other bad actors can use that data to try to make purchases for themselves or to open illegitimate lines of credit.

Fighting Back – Monitoring Credit Reports, Credit Freezes, and other Protections

Ordinary people have tools at their disposal to protect themselves. The first is monitoring your credit reports and your credit score. The big three credit reporting agencies currently allow you to request a credit report for free up to once per week. By regularly checking on your reports you will be able to spot newly opened credit accounts or hard credit checks right away and then take action. Another tool is credit freezing – credit reporting agencies allow you to freeze your credit which will stop new credit accounts from being opened in your name. This can be done when you suspect someone else has been using your identity or information to stop any further harm. The freeze can be lifted when you are ready to open a new account yourself.

Large companies also often offer free credit monitoring services and identity theft protection for a certain period to customers affected by a breach, which you should pursue if your data is leaked. Finally, consumers can reduce the risk of information being leaked by following some basic data security principles like using unique passwords and creating accounts only with trusted companies. By using these free tools and methods you can feel more secure that when breaches happen, you can respond and take back control of your information.

Credit Report Errors, Credit Reports, Identity Theft, Mixed Case File, News

Can You Tell the Difference Between Identity Theft and Mixed Files?

Posted on by Credit Report Law Group

You may be familiar with the problem of identity theft. But can you tell apart identity theft, and a “mixed file” issue where a credit reporting agency (“CRA”) mixes up the credit history of two or more people? Making the distinction can be very important for deciding how to respond.

How Can I Tell if my Identity has been Stolen?

If you begin to receive texts or emails saying that you have made purchases at unfamiliar stores, if there are unknown charges on your bank statements, or if you review your credit report and see that there are new accounts or loans opened in your name that you did not open, these could be signs that someone is using your identity. In this situation you should put a fraud alert on all your credit reports, for free, to signal lenders that your identity may have been stolen and to stop them from opening more accounts under your name.

How Are Mixed Files Different?

Mixed Files on the other hand happen when a CRA like Equifax or Experian mixes the credit history of two different people. For example, a person with a name that is very similar or identical to yours could have some of their credit accounts placed into your file.

How do you tell these two problems apart? First, when you request your free credit reports from the three major CRAs by using annualcreditreport.com, carefully check to see whether the erroneous or unfamiliar accounts are appearing on just one agency’s report, or if the accounts are showing up on all three of the agencies’ reports. If they show on all of the reports, this can be a warning sign that an identity thief has been opening accounts in your name, because all of the agencies were given the information.

If however, these accounts appear on just one of the reports, this can be a hint that one agency has made an error on your report or created a mixed file. In either case, you should dispute the incorrect information in writing with each of the CRAs immediately. If you suspect someone has stolen your identity you can freeze your credit by contacting the CRAs to stop any more accounts from being opened. In general, you should consistently monitor your credit reports to not be surprised by bad news long after the problems occurred.

Background Check Errors, Credit Report Errors, Credit Reports, Credit Scores, Identity Theft, Mixed Case File, News

Consumer Reporting Complaints (Part 2)

Posted on by Credit Report Law Group

Read part 1 by clicking here!

From January 2020 to September 2021, CFPB received more than 700,000 consumer complaints about Experian, TransUnion, and Equifax—the national credit reporting agencies (NCRAs). But the number of successfully resolved complaints dropped to just 5%. Why? According to a recent report by the Consumer Financial Protection Bureau (CFPB), one reason for that is, unfortunately, many people rely on commercial “credit repair” companies to file their complaints.

This is unfortunate because the CFPB receives thousands of complaints about these “credit repair firms,” too.

While consumers have real concerns (for example, identity theft or a mixed file), credit repair companies often file meritless complaints on their behalf. These firms frequently rely on mass-produced templates and dispute irrelevant facts. As we explained in our previous post, by law, the NCRAs don’t have to investigate frivolous complaints, so NCRA computers quickly identify and disregard these form complaints.

Problems such as these are so common that CFPB and other federal agencies are suing many “credit repair” companies for violation of federal laws. Issues with these purported credit repair companies include:

  • Charging consumers illegal fees
  • operating in bad faith
  • misleading consumers, and
  • defrauding their clients

The wrongdoing of these companies is so pervasive that the NCRAs say dealing with their bogus reports is hurting their ability to address legitimate complaints.

While it will probably take an act of Congress to repair the damage being done by duplicitous credit repair companies, individual consumers should walk away with two key insights from this report:

First, individuals have the right to dispute problems with their credit report—correcting their record and even receiving financial compensation for errors

But a cheap, quick form complaint is too easy for a credit bureau to disregard—and that includes a complaint filed by a credit repair company. All too often, these companies aren’t the experts they claim to be.

That’s why consumers struggling with problems in their credit reports should consult with an attorney. An attorney will evaluate their claim and prepare a solid complaint that the NCRAs must investigate and respond to.

If you have issues with your credit report and the credit bureaus aren’t taking action to address your complaints, that isn’t the end of it. You have recourse. But you need to file a complaint that the NCRA can’t dismiss. To do that, contact an attorney. Our firm specializes in repairing clients’ credit records and obtaining compensation for damages they have sustained. We specialize in helping clients like you.

Background Check Errors, Consumer Financial Protection Bureau (CFPB), Credit Report Errors, Credit Reports, Identity Theft, News

Consumer Reporting Complaints (Part 1)

Posted on by Credit Report Law Group

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:

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!