News & Media
hands typing on laptop with credit score meter
tolgart / Getty Images

Credit Report Errors: The Top Consumer Complaints

Many buyers focus on their credit scores for the first time and find errors, which aren’t always easy to fix. A CFPB report shows top credit score repair issues.

WASHINGTON – A new analysis by the U.S. Consumer Financial Protection Bureau (CFPB) focuses on the big three consumer credit reporting companies – Equifax, Experian and TransUnion – and analyzes how well they’re responding to consumers who find errors in their credit scores.

Overall, CFPB says the credit agencies in 2021 “reported relief in response to less than 2% of covered complaints, down from nearly 25% of covered complaints in 2019.”

“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” says CFPB Director Rohit Chopra. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

Credit reporting plays a critical role in consumers’ lives, and has an oversized impact on homebuyers. In some cases, a buyer with a credit score problem can’t qualify for a mortgage at all; in other cases, they can qualify for a mortgage, but it comes with an interest rate higher than they deserve.

In addition to home buying, credit reports impact may aspects of a consumer’s life. It can also impact decisions about employment, insurance and even essential utilities. For consumers, inaccuracies drive up the cost of credit and severely limit opportunities, such as starting a small business or buying that new home.

From January 2020 through September 2021, consumers submitted more than 700,000 complaints to CFPB regarding Equifax, Experian and TransUnion – 50% of all CFPB complaints for that period. The top complaint topic: Inaccurate information. In most cases, the complaint claims that the inaccurate info on their report belongs to someone else, and many says they’re victims of identity theft.

According to CFPB, it generally found that the three credit reporting agencies didn’t provide “substantive responses,” and they usually alleged that the complaints about credit score problems were “sent in by third parties.” However, CFPB says consumers can authorize third-party representatives to submit complaints on their behalf, suggesting that the excuse isn’t valid.

Equifax, Experian and TransUnion’s statutory obligations

The Fair Credit Reporting Act (FCRA) requires Equifax, Experian and TransUnion to review complaints sent to them through CFPB when consumers say there is incomplete or inaccurate information, and the consumer has already tried to fix the problem directly with the company. After review, the credit-score firms must then report back to CFPB.

Under the latest report, CFPB says it found the following problems:

  • Equifax most often promised to open investigations and send the results to the consumers later, but it failed to provide the CFPB with the outcomes of the investigations.
  • TransUnion made similar promises and frequently failed to provide the outcomes of investigations to CFPB. It often stated it would take no action on complaints because it believed the complaints were submitted by third parties.
  • Experian frequently stated it would take no action because it believed the complaints were submitted by third parties; however, it did respond to the remaining complaints with substantive responses.

Medical billing mistakes make up a large share of CFPB’s credit score complaints. It says that “opaque pricing, the complex system of insurance coverage and frequent delays in consumers finally receiving bills create an unnavigable quagmire.”

In many cases, CFPB claims, consumers often struggle to even determine whether the debt belongs to them – and, if it does, whether the amount is accurate.

Key report findings

Overall, consumers describe a consumer reporting system that is not working for them. Other key report details on problems:

  • Equifax, Experian and TransUnion relied heavily on template complaint responses instead of providing meaningful and thorough responses to consumers, despite having up to 60 calendar days to respond.
  • Beginning in early 2020, Experian and TransUnion stopped providing substantive responses to consumers’ complaints if they suspected a third-party was involved in submitting the complaint.
  • In many instances, Equifax and TransUnion promised to investigate but then failed to provide the outcomes of their investigations to CFPB, instead saying they’d forward the complaints to their “dispute channel.”

Overall, CFPB says more than 50% of consumers’ complaints didn’t receive the review required under federal law, often with credit reporting agencies saying that they suspected it was submitted by third parties.

“Overall, consumers describe feeling frustrated and stressed when the nationwide consumer reporting companies’ automated processes for correcting inaccuracies do not work or when they do not get responses to their concerns,” CFPB says in its release.

Credit score resources

© 2022 Florida Realtors®