Shopper complaints about credit score reporting companies highlighted in CFPB report

The Shopper Monetary Safety Bureau (CFPB) launched a report Tuesday that particulars complaints about shopper credit score reporting companies and their efforts to deal with these issues.

The CFPB is required by the Honest Credit score Reporting Act to supply an annual report about complaints submitted by shoppers concerning the nationwide shopper reporting companies (NCRAs) – Equifax, Experian and TransUnion. The most recent version of the report was primarily based on the 488,000 shopper complaints the CFPB despatched to the NCRAs between October 2021 and September 2022.

“TransUnion, Equifax and Experian routinely prime the listing of complaints submitted by shoppers,” mentioned CFPB Director Rohit Chopra. “We will likely be exploring new guidelines to make sure that they’re following the regulation quite than reducing corners to gas their revenue mannequin.”

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CFPB discovered that following modifications made by the NCRAs in response to final 12 months’s report, the businesses have supplied shoppers with extra substantive responses which might be tailor-made to complaints and embody explanations. Equifax, Experian and TransUnion are additionally reporting the closure of extra complaints by offering reduction to shoppers within the type of an up to date credit score report.

The most typical grievance despatched to NCRAs involved incorrect info on a shopper’s credit score report. Inaccurate stories that harm a shopper’s credit score rating can increase their borrowing prices and make it more durable to purchase a house, begin a enterprise or work at sure jobs that require a credit score verify.

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The most typical grievance despatched to NCRAs involved incorrect info on a shopper’s credit score report. (iStock / iStock)

The second commonest challenge referred by the CFPB to the NCRAs concerned issues with an investigation carried out by a reporting firm. In response to the CFPB’s report, 93% of shoppers reported having beforehand tried to repair the issue with their credit score report by contacting an NCRA.

The third commonest grievance despatched to NCRAs concerned the improper use of a shopper’s credit score report – though that was a extra vital challenge for the opposite smaller credit score reporting companies (CRAs) which might be additionally included within the CFPB’s report.

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The second commonest challenge referred by the CFPB to the NCRAs concerned issues with an investigation carried out by a reporting firm. (iStock)

The Shopper Knowledge Business Affiliation supplied the next assertion concerning the CFPB report back to Fox Enterprise on behalf of the nationwide credit score bureaus: “The Shopper Knowledge Business Affiliation (CDIA) is reviewing the CFPB report intimately. Shoppers, credit score reporting companies, banks and regulators proceed to share a standard objective relating to credit score stories: they need to be as correct and dependable as doable. The nationwide credit score reporting companies (NCRAs) play an necessary position within the monetary lives of shoppers and we take that accountability critically.”

It is unclear whether or not the CFPB will put ahead new rules that apply to NCRAs or overhaul the credit score reporting system extra broadly. The company declined to supply a further remark past Chopra’s assertion within the press launch accompanying the report.

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Nonetheless, the CFPB did say that the company “expects the three nationwide shopper reporting corporations to proceed enhancing how they service shoppers.” It beneficial that Equifax, Experian and TransUnion take the next steps:

• Think about whether or not implementing automated processes would require shoppers to do extra work to train their authorized rights.
• Acknowledge that buyers could start to rely extra on communications applied sciences to draft complaints that ease their writing burden however might lead to distinctive complaints being improperly grouped with similar-sounding complaints.
• Allow elevated shopper participation on the info facet of shopper reporting to probably scale back inaccuracies that stem from poor visibility for shoppers into their very own information.