Have you found errors on your credit report?
Errors can be costly and difficult to dispute. A federal agency plans to write new rules to protect consumers.
The Consumer Financial Protection Bureau has flexed its muscles on behalf of consumers again -- taking on the job of overseeing the nation's powerful credit-reporting bureaus.
Too much government regulation, you say? Others might think: It's long overdue.
Credit bureaus -- the biggest by far are Experian, Equifax and TransUnion -- compile the credit histories and credit scores that greatly influence whether you get a mortgage or other consumer loans and how much interest you'll pay. They extend their tentacles into other areas of your life, including insurance rates, apartment leases and even employment.
If your credit reports contain a mistake, it can be costly. So, is it too much to expect that credit bureaus get your information right? How often don't they?
"Credit scars," an eye-opening investigation by The Columbus Dispatch, examined nearly 30,000 consumer complaints filed with state and federal agencies about the three big credit bureaus. The complaints covered everything from wrong names to erroneous past-due accounts. (Post continues below.)
The Dispatch also said:
Nearly 200 people told the FTC that their credit reports listed them as deceased, cutting off their ability to access credit.
More than half of all who filed complaints with the FTC said that despite their best efforts, they could not persuade the three major credit-reporting agencies to fix the problems.
Says The New York Times, "Various reports have found that between 1% and 25% of credit reports contain errors that could hurt consumers' ability to borrow."
It happened to Washington Post personal-finance columnist Michelle Singletary. She wrote:
A storage company claimed I owed them money. I contacted the credit bureau (the company had reported the damaging data only to one bureau) and disputed the information. The bureau then asked the company that reported the information to verify the debt. What do you think the storage company did?
They reported back the same wrong information, reducing my credit score by about 100 points.
After more complaints by Singletary, the erroneous information on her credit report was finally removed.
Several years ago, an associate editor at Kiplinger detailed her prolonged effort to strip an erroneous 4-year-old past-due $38 water bill from two of her credit reports. One of her credit scores rose by 80 points after she got the debt removed.
Another New York Times story mentioned a woman who "had been denied employment and credit because her filing was mixed up with a felon who had the same name and birthday."
The CFPB's new oversight will apply to the 30 largest credit-reporting agencies in the United States. The big three credit bureaus alone each have credit histories on more than 200 million American adults. It's extremely likely you're among them.
New rules are coming, and it appears that many consumers support more regulation of the financial institutions that have so much power over us. A new poll found that 66% of voters overall and 69% of independents think the CFPB is needed. (The poll was done for AARP, the Center for Responsible Lending, Americans for Financial Reform and the National Council of La Raza.)
First step: You can pull one free report a year from each of the big three credit bureaus at AnnualCreditReport.com.
Have you found an error in one of your credit reports? How easy was it to dispute and get results?
More on MSN Money:
Credit Scores period should be done away with, PERIOD!!!! Depending strickly on a "credit score" to extend credit is lazy underwriting and what brought this country to the housing/mortgage mess we are in now. Lenders should go back to having to take the time to review a persons overall credit, ability to pay, circumstances that may have lead to a slow payment to determine a persons credit worthiness. If this country is going to recover from this the ashes caused by the past decade and half of lender by credit scores then we are going to have to go back to the fundementals of credit underwriting. Not all slow or reported past due payments makes a person a poor credit rish.
I've been in the lending business for over 30 years and credit scroes are the worse thing that has ever happened. Example... a person can file bankruptcy and come out of it with over 700 credit scores and a year later awarded for having a high scrore. However, A person who was raised that paying their creditors were the right thing to do; struggles to pays through things such as employment layoff, or family illness, but pays... is adversly affected for doing the right thing FOR THE NEXT SEVEN YEARS or until it falls of their credit report. What is wrong with this picture?
These power hungry and dangerous outfits see themselves as being above everyone and anything. I was a Vice President of a national bank when one of our credit reports was misreported. The customer came to see me and we were able to verify, in about five minutes, that what had been reported was wrong. I called the local office of the credit bureau, explained the error, and was promised that a correction would be entered immediately. A year later I was still writing letters to other people our customer wanted to deal with. I could not believe the excuses I heard from the credit reporting agency but they were imaginative to say the least.
I think that there needs to be more, and very severe, regulation of the industry with very substantial fines for failure to correct errors in a reasonable time frame (under 30 days). When an organization has the power to disrupt people's lives in the manner that the big three can, the penalties for uncorrected errors need to be so severe that they really hurt or nothing will change.
It is about time: I have been working with Credit Reporting Agencies for over 20 years on MANY errors found on my credit reports: No matter how much proof I had, the Reporting agencies always favored the Creditor: The only way it would be removed in many of my cases was the 7/10 year removal process.
I am glad to see our Gov investigating and monitoring something that has significant impact on consumers.
Personally I do not believe a for profit private company should be allowed to collect and compile information on private citizens.Credit reporting agencies should have to first get permission and second pay me if they want to maintain a credit history on my personal information
Having said that I have heard far more horror stories about mistakes the IRS makes and trying to get them corrected, At least a credit history company can not seize you assetts, Assess unreasonable fines and penalties, Attach your paycheck or access your checking or saving account.
About time someone went after them. One error by them and it take 6 months plus to fix.
I notified the "big three" of a change to my credit status.
Two of them took it just fine.
The one based OFF SHORE of the United States in a FOREIGN COUNTRY, insisted that I send a copy of my birth certificate, my social security card and my marriage license before they would consider my proof . Send it through the mail to them?
I've gone all cash. Where I need credit cards, I use prepaid ones (as much as do not like Capital One, I do use their prepaid card and it works well).
How did these shysters gain so much power over all of us?
And what is next?
The same kind of fraud as portrayed by "Inside Job"?
Sorry. Government will not change this: They are a part of it.
This just another one of our loss of freedoms -- get used to it because it will change: It will get worse.
I just checked my 3 scores recently...Big difference and no real reason why...Experian - 737
Equifax - 615 is the main gap which I don't understand and of course can't get reasons why.
I also signed up for 'Score Sense'...an independant company who gives scores...which the credit companies don't give unless you pay them...heres what I got from 'Score Sense'...
Experian - 726...Equifax - 678...TransUnion - 766...not near what the credit co's are saying.
They also have my previous adresses wrong...listing 2 addresses where I never lived !! Crazy !!
These companies are poorly run...make big mistakes...fixing is very difficult...communication with them is very difficult...but they affect our lives...our money...our financial standing in the credit system !
I had occasion to get all over Experian, the WORST one of all. They made an obvious mistake on my credit report and I called them on it saying I would ledigate it if they didn't change it. They sent me back a report with NO credit scores on it. I haven't been able to fix it. You see, if I could walk into their office, I GUARANTEE it would get fixed. Easy for them when they are protect by phones and are able to hang up on you if they don't like what they hear. Just like the loan officers at banks. It's very lucky for them that there is not way to see them face to face. It will happen in the future. There is a Rebellion coming in OUR country. It will be the GOOD people against the bad. Guess who will win? I think it is very smart for Bureau to consider re-writing the RULES and then, of course, following them.
Concerned AMERICAN, Larry Velasco
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