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Is your credit report wrong? How to find out and fix it

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The Federal Trade Commission this week released its latest findings in a ten-year study on the accuracy of credit reports. This report is another reminder of how important it is to review your credit report for inaccuracies.

What does this mean to you?

You can check your three credit reports for free once every 12 months at annualcreditreport.com. Dispute any errors, and contact the company that reported the incorrect information to correct it.

For example, if your credit report says that you are 30 days behind on a payment to Bank ZYX, but you’re not actually behind, dispute the error with the credit bureau and also by contacting Bank ZYX directly.

If that doesn’t work, file a complaint with us. You’ll get a confirmation number immediately, email updates along the way, and be able to check the progress online.

What’s in a credit score?

The information in your credit report is used to make a credit score, which translates this great mass of information into a single number that essentially indicates the expected likelihood of repaying a loan on time. Generally, the lower the score, the lower the likelihood you’ll repay a loan on time, compared to other consumers.

How are credit reports used?

Credit reports are used in a wide range of situations – including decisions about whether you can rent a home, and in some states, how much you pay for auto and homeowners’ insurance. Sometimes they’re even used in hiring decisions. Banks, landlords, cell phone providers, and many kinds of other companies rely on the accuracy of this information to make decisions.

What happens if there’s a mistake on my credit report?

A mistake in your credit report can cost you because it can stop you from getting the best rate you’re eligible for any time you borrow money. If there are mistakes on your credit report that make you look bad, then you could be paying more than you should be every month.

Do you have more questions about credit reports and scores or other financial questions? Ask CFPB.

  • M. J

    I filed a complaint when I found out there was ( and still is) a mistake in my credit report. I spent several months of my energy trying to have it corrected to no avail. CFPB referred the issue to the Department of Education since it is a Student Loan issue involving Sallie Mae. What happened was that at the time ( not anymore), I allowed them automatic monthly withdrawals from my bank account. But, when I returned to school, my loan was deferred. Three months after my graduation, Salliemae resumed its automatic withdrawal from my bank, except this time, they increased the monthly amount without consulting me. At the same time that they were withdrawing automatic payments from my bank account, they were concurrently reporting to the credi bureau that I was delinquent. My bank submitted proof of their withdrawals to CFPB. To this day, the delinquent Code 3 remains on my credit report. After while. One gets tired, especially if one is dealing with other life issues, such as family, sickness, etc.

    The negative consequence of SallieMae’s action is a decreased in credit score.

    • denise

      you need to see the 60 minutes clip aired on February 10, 2013 see:Credit Bureau Association Disputes 60 Minutes Contentions of 40 Million Errors

      Decrease Font SizeTextIncrease Font SizeFeb 12 2013, 1:33PM

      The credit reporting industry’s trade group, the Consumer Data Industry Association (CDIA) is vigorously disputing much of a CBS 60 Minutes (watch below) report that aired last Sunday, February 10. CDIA has issued a barrage of press releases documenting its correspondence with the show’s producers and presenting its responses to the show’s assertions.

      The 60 Minute segment which can be viewed below focused on the dispute resolution process used by major credit reporting agencies (CRAs). It presented some findings from a Federal Trade Commission eight year study due to be released the following day and interviewed FTC Chairman Jon Leibowitz who said that one out of five of the 200 million credit bureau files has an error and one out of ten has an error that might lower the credit score. CBS reporter Steve Croft also interviewed Ohio Attorney General Mike DeWine who said that “there was no doubt” CRAs were breaking the Fair Credit Reporting law.

      The centerpiece of the show was an interview with a woman who, after repeatedly being denied credit starting in 1999 finally found that, while the free credit report provided to her was clean, potential lenders were uniformly provided a different version with highly negative information on an unrelated party. It took better than a decade and a lawsuit against two of the CRAs to get her credit cleared.

      CBS said it approached the major credit reporting companies in December requesting interviews about their dispute resolution procedures. The companies referred CBS to CDIA which declined to appear. CDIA said of the invitation, “Knowing 60 Minutes reputation for the sensational at the expense of the factual, we decided the better alternative was to respond in writing to any questions they had rather than on camera where most of our responses would be edited out of context, if at all.”

      The Association provided a formal statement to CBS which said in part: “Repeated studies have shown that despite the fact that billions of individual pieces of data are received and processed each year, the credit reports assembled provide highly accurate assessments of consumer history that both businesses and consumers can use to make informed financial decisions.” CDIA quoted a Consumer Financial Protection Bureau (CFPB) study which found that between 1.3% and 3.9% of consumers disputed information in their credit report that they believed was in error and another from the Policy and Economic Research Council that concluded there was only a one-half of one percent error rate that would result in a consumer paying a higher price for credit

      The statement continued; when errors are found, “credit reporting agencies have instituted robust consumer service procedures to ensure any errors can be quickly corrected. Offering consumers the opportunity to dispute information either by phone or online speeds up the process and over half of all disputes are received in this manner.” Consumers who use the dispute process, CDIA said, are generally satisfied with the results; the Policy and Economic Research Council study found 95% consumer satisfaction.

      On February 1 CBS provided a list of questions to Stuart Pratt, President and CEO of CDIA which asked for comments on the DeWine statement and on assertions by former Experian dispute resolution employees to the effect that they processed up to 90 disputes a day without having access to phone, email, or documentation supporting the consumer’s complaint. Pratt responded with statistics from a Federal Trade Commission study of the dispute process done in 2003, results of a more recent internal study and with a statement from Experian which directly contradicted the information provided by its former employees. The questions and responses can be read in their entirety here.

      On Friday February 9 CDIA saw a promotion for the Sunday broadcast and issued a preemptive press release that said the promo “demonstrates that ’60 Minutes’ has selectively interpreted an upcoming FTC study to ignore the most significant results. The FTC study shows that 98% of credit reports are materially accurate, a fact it appears ’60 Minutes’ is set to ignore.” Further, CDIA said, FTC found that “The measure of accuracy is tied to the question of when an error has a consequence for consumers, not just when a report contains an error that will have little or no impact on creditworthiness.”

      “It is irresponsible for ’60 Minutes’ to be reporting the findings of the study in this manner, Pratt continued. “The FTC’s study concludes that only 2.2 percent of credit reports have an error that would lead to higher-priced credit for the consumer. It is simply wrong to suggest that 21 percent have errors that would lead to this consequence.”

      The show also states that a disputed error is “nearly impossible to expunge,” Pratt said. “It is irresponsible to suggest to consumers that they might as well not take action when they have a question about their credit report.”

      He also disputed allegations that actions of CDIA members are in violation of federal law saying that federal courts have found just the opposite on multiple occasions. “There seems to be some misunderstanding about what the law requires of a credit bureau when a consumer submits a dispute. This is a good time to get the facts straight,” he said.

      The Fair Credit Reporting Act requires a credit bureau to send the consumer’s dispute to the lender or other data source within five days of receiving it. Congress recognized that only the lender has the relevant data to determine if their reporting is in error.

      The 60 minute statement that “They’re not doing an investigation at all” ignores the timeframes dictated by federal law under which a dispute must be resolved. In almost every instance resolution is well within the deadline. Second, it ignores recent findings by CFPB that credit bureaus are working proactively to resolve disputes even when the data resides with the consumer’s lender. Lastly, it completely ignores the advances the CRA’s have made and are implementing – and which the CFPB and FTC have reviewed – to significantly streamline the reinvestigation process.”

      “Let’s have a responsible discussion and step back from the hyperbole,” urged Pratt. “Credit reports arematerially accurate 98% of the time, and when they do contain mistakes, our members work to resolve them quickly and to the consumers’ satisfaction 95% of the time.”

      On Monday the long-term FTC study cited by 60 Minutes was released. CDIA said the report “Reconfirmed the findings of several recent studies that conclude that credit reports are highly accurate and play a critical role in facilitating access to fair and affordable consumer credit. The FTC’s research determined that 2.2 percent of all credit reports have an error that would increase the price a consumer would pay in the marketplace and that fully 88% of errors were the result of inaccurate information reported by lenders and other data sources to nationwide credit bureaus. The study also showed that 95 percent of consumers are unaffected by errors in their credit report.”

  • mjkirshner

    CFPB recommends disputing errors on a credit report, but fails to warn consumers that if they file a dispute and the dispute shows up on their credit report, they will automatically be rejected for a Fannie Mae or Freddie Mac mortgage, due to automated underwriting software that rejects an application if the borrower has a dispute on a credit report. We are told that it is responsible to check our credit reports and that we have the right to dispute suspected errors, but we are then penalized for doing so. I disputed an entry on my credit report, resolved the issue with my creditor, but now cannot get Transunion to remove the dispute from my record, even though the creditor sent me a letter stating that my account is paid in full and also sent Transunion a request to remove the dispute from my record. I have an contract to purchase a home and an application for a mortgage, but I cannot get it approved because the dispute shows up on my credit report, even though I and my creditor agree that the dispute is resolved and we have both requested that the dispute be removed from my credit report. I have spent more than two weeks trying to get this resolved, and now risk losing my contract and my deposit because the credit bureau will not comply with these requests to correct the report.

  • http://twitter.com/MiCreditLawyer Gary Nitzkin

    Consumers have rights under the Fair Credit Reporting Act. We understand how frustrating it is to try and get errors removed from your credit report. We are a consumer law firm that represents clients for FREE in these matters. We file the disputes for the consumer and, if necessary, file a lawsuit against the credit reporting agencies to make them remove the error. Why deal with the hassle when you can have a consumer credit attorney do it for free? Michigan Consumer Credit Lawyers – we can represent people in all states under the federal law.

    • ccwill

      I appreciate your altruism, but please explain to me how could you and more importantly why would you provide this service for free? Just a hardened, skeptical consumer here wondering how this makes practical sense. What’s the catch?

  • AP

    Is there a way for the CFPB to make these articles available as a pdf so that we could print and share them with the consumers we work with as an educational tool? I tried to print to pdf but it comes out with a lot of jibberish and symbols and shows all of the comments.

  • denise

    You all need to see what 60 minutes aired several Sunday’s ago in relation to the Three Credit Bureaus.Credit Bureau Association Disputes 60 Minutes Contentions of 40 Million Errors

    Decrease Font SizeTextIncrease Font SizeFeb 12 2013, 1:33PM

    The credit reporting industry’s trade group, the Consumer Data Industry Association (CDIA) is vigorously disputing much of a CBS 60 Minutes (watch below) report that aired last Sunday, February 10. CDIA has issued a barrage of press releases documenting its correspondence with the show’s producers and presenting its responses to the show’s assertions.

    The 60 Minute segment which can be viewed below focused on the dispute resolution process used by major credit reporting agencies (CRAs). It presented some findings from a Federal Trade Commission eight year study due to be released the following day and interviewed FTC Chairman Jon Leibowitz who said that one out of five of the 200 million credit bureau files has an error and one out of ten has an error that might lower the credit score. CBS reporter Steve Croft also interviewed Ohio Attorney General Mike DeWine who said that “there was no doubt” CRAs were breaking the Fair Credit Reporting law.

    The centerpiece of the show was an interview with a woman who, after repeatedly being denied credit starting in 1999 finally found that, while the free credit report provided to her was clean, potential lenders were uniformly provided a different version with highly negative information on an unrelated party. It took better than a decade and a lawsuit against two of the CRAs to get her credit cleared.

    CBS said it approached the major credit reporting companies in December requesting interviews about their dispute resolution procedures. The companies referred CBS to CDIA which declined to appear. CDIA said of the invitation, “Knowing 60 Minutes reputation for the sensational at the expense of the factual, we decided the better alternative was to respond in writing to any questions they had rather than on camera where most of our responses would be edited out of context, if at all.”

    The Association provided a formal statement to CBS which said in part: “Repeated studies have shown that despite the fact that billions of individual pieces of data are received and processed each year, the credit reports assembled provide highly accurate assessments of consumer history that both businesses and consumers can use to make informed financial decisions.” CDIA quoted a Consumer Financial Protection Bureau (CFPB) study which found that between 1.3% and 3.9% of consumers disputed information in their credit report that they believed was in error and another from the Policy and Economic Research Council that concluded there was only a one-half of one percent error rate that would result in a consumer paying a higher price for credit

    The statement continued; when errors are found, “credit reporting agencies have instituted robust consumer service procedures to ensure any errors can be quickly corrected. Offering consumers the opportunity to dispute information either by phone or online speeds up the process and over half of all disputes are received in this manner.” Consumers who use the dispute process, CDIA said, are generally satisfied with the results; the Policy and Economic Research Council study found 95% consumer satisfaction.

    On February 1 CBS provided a list of questions to Stuart Pratt, President and CEO of CDIA which asked for comments on the DeWine statement and on assertions by former Experian dispute resolution employees to the effect that they processed up to 90 disputes a day without having access to phone, email, or documentation supporting the consumer’s complaint. Pratt responded with statistics from a Federal Trade Commission study of the dispute process done in 2003, results of a more recent internal study and with a statement from Experian which directly contradicted the information provided by its former employees. The questions and responses can be read in their entirety here.

    On Friday February 9 CDIA saw a promotion for the Sunday broadcast and issued a preemptive press release that said the promo “demonstrates that ’60 Minutes’ has selectively interpreted an upcoming FTC study to ignore the most significant results. The FTC study shows that 98% of credit reports are materially accurate, a fact it appears ’60 Minutes’ is set to ignore.” Further, CDIA said, FTC found that “The measure of accuracy is tied to the question of when an error has a consequence for consumers, not just when a report contains an error that will have little or no impact on creditworthiness.”

    “It is irresponsible for ’60 Minutes’ to be reporting the findings of the study in this manner, Pratt continued. “The FTC’s study concludes that only 2.2 percent of credit reports have an error that would lead to higher-priced credit for the consumer. It is simply wrong to suggest that 21 percent have errors that would lead to this consequence.”

    The show also states that a disputed error is “nearly impossible to expunge,” Pratt said. “It is irresponsible to suggest to consumers that they might as well not take action when they have a question about their credit report.”

    He also disputed allegations that actions of CDIA members are in violation of federal law saying that federal courts have found just the opposite on multiple occasions. “There seems to be some misunderstanding about what the law requires of a credit bureau when a consumer submits a dispute. This is a good time to get the facts straight,” he said.

    The Fair Credit Reporting Act requires a credit bureau to send the consumer’s dispute to the lender or other data source within five days of receiving it. Congress recognized that only the lender has the relevant data to determine if their reporting is in error.

    The 60 minute statement that “They’re not doing an investigation at all” ignores the timeframes dictated by federal law under which a dispute must be resolved. In almost every instance resolution is well within the deadline. Second, it ignores recent findings by CFPB that credit bureaus are working proactively to resolve disputes even when the data resides with the consumer’s lender. Lastly, it completely ignores the advances the CRA’s have made and are implementing – and which the CFPB and FTC have reviewed – to significantly streamline the reinvestigation process.”

    “Let’s have a responsible discussion and step back from the hyperbole,” urged Pratt. “Credit reports arematerially accurate 98% of the time, and when they do contain mistakes, our members work to resolve them quickly and to the consumers’ satisfaction 95% of the time.”

    On Monday the long-term FTC study cited by 60 Minutes was released. CDIA said the report “Reconfirmed the findings of several recent studies that conclude that credit reports are highly accurate and play a critical role in facilitating access to fair and affordable consumer credit. The FTC’s research determined that 2.2 percent of all credit reports have an error that would increase the price a consumer would pay in the marketplace and that fully 88% of errors were the result of inaccurate information reported by lenders and other data sources to nationwide credit bureaus. The study also showed that 95 percent of consumers are unaffected by errors in their credit report.”

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