CLEVELAND — Your credit score can determine your insurance rates, percentage rates on loans, even employment. In a year that’s seen so many problems with the pandemic add credit reporting to the list. The issue? Well, in our search for that answer we found out it depends who you ask. It’s a bit of a mess.
“What’s it like trying to buy a house right now?” we asked Eric Eisenmann, 34, from Parma Heights.
“It’s extremely stressful,” he replied.
Eisenmann told us his bank mistakenly closed his account.
They admitted to it. They ended up opening back up my account,” he said, but his credit score went down 120 points impacting him getting a home. “I hope that my credit score gets fixed so I can buy a house at an APR that I was supposed to be at,” Eisenmann said.
CONSUMER FINANCIAL PROTECTION BUREAU
“What we witnessed in 2020 compared to 2019 was an enormous increase in complaints about credit reporting,” said John McNamara. He’s the Principal Assistant Director of Markets at the Consumer Financial Protection Bureau. The CFPB says it ensures financial institutions are in compliance with federal consumer laws.
“This year we observed that the nationwide consumer reporting companies Equifax, TransUnion, and Experian stopped providing complete and accurate responses,” McNamara told us.
Responses to the 107% jump in credit reporting complaints against companies. In 2019, there were 165,000, but it went to 319,000 during 2020.
“We have enforcement authority over players in the space and we have supervisory authority,” said McNamara.
That’s true, but enforcement against the big three bureaus is rare. In the past 2+ years, the CFPB has only taken action against Equifax and that was for a massive, widely-publicized 2017 data breach.
“Do you find that the actions taken lead to positive results for consumers?” we asked McNamara.
“One would hope,” he responded.
CFPB said 99% of the complaints have gotten a timely response. We found in CFPB records that in Ohio, there are thousands of credit-related complaints in the last 3 years. Some claiming that the investigation was taking more than 30 days, plus, bad credit info, and notification issues.
CONSUMER REPORTS WEIGHS IN
“Because reports have such a big impact on our financial lives, it’s a major concern for consumers,” said Chuck Bell. He’s the Programs Director at Consumer Reports, an organization that has long highlighted problems with errors in people’s credit reports. “There are very weak incentives to investigate it and correct it. So even if you raise an issue, they’re often very slow to respond and correct your information,” said Bell.
CONSUMER DATA INDUSTRY ASSOCIATION
“On this point, they’re wrong,” said Francis Creighton about Bell’s claims. Creighton is the President and CEO of the Consumer Data Industry Association which is a trade group that represents the credit industry. Experian, Equifax, and TransUnion are all members of the group. “We’ve got to fix (errors),” said Creighton. “The law requires us to fix it, but more importantly, our whole business is about getting it right every single time.”
He attributed the jump in credit reporting complaints to businesses that claim they can fix your credit scores.
“They stem from credit repair companies that are attempting to remove accurate but negative information off people’s credit reports,” Creighton told us.
Nobody expects perfection, but what we found out is there’s a big disconnect among the agencies, experts, and businesses overseeing your credit scores. Disagreements and finger-pointing can leave the consumer in the middle when there are issues.
“Be proactive,” said house hunter Eisenmann. “Don’t rely on other people to fix your problem. Call everyone you can about it.”
We contacted Experian, Equifax and TransUnion each for an interview. Equifax and TransUnion did not respond. Experian did not go on camera, but did help facilitate the interview with Creighton.
Here are a few things you can do to help your credit score knowledge. Check your credit reports. Because of the pandemic, you can check your scores for free right now every week. Plan ahead. If yo know you’ll be buying a house or a car in the next 6-12 months, start examining your scores now so there are no surprises when you sit down to buy. And, file a complaint. The Consumer Financial Protection Bureau has an online form here.
Here is more information given to us by the CFPB:
The CFPB’s Office of Consumer Response currently has approximately 110 FTEs and is able to process the increased complaint volume at this time. Consumer Response routes consumers’ complaints about financial products and services—and any documents they provide—directly to financial companies, and works to get consumers a timely response. In 2020, the CFPB sent approximately 456,100 complaints to approximately 3,300 companies for review and response. Of those complaints, 99% received a timely response. Consumers’ complaints and companies’ responses provide the Bureau with important information about the types of challenges consumers are experiencing with financial products and services and how companies are responding to consumers’ concerns. Consumer Response uses a variety of approaches to identify trends and possible consumer harm in consumers’ complaints. Examples include:
- Reviewing cohorts of complaints and company responses to assess the accuracy, timeliness, and completeness of an individual company’s responses to complaints sent to them for response
- Conducting text analytics to identify emerging trends and statistical anomalies in large volumes of complaints
- Visualizing data to highlight geographic and temporal patterns and using tools to filter, sort, and search complaints
- Consumer Response’s analyses support the Bureau’s work to supervise companies, enforce federal consumer financial laws, propose rules, spot and assess emerging issues, and develop tools that help empower consumers to make informed financial decisions.
Here is more information given to us by CDIA:
Hi Jonathan,
Thanks for reaching out. Below is a statement that can be attributed to Francis Creighton, President and CEO of the Consumer Data industry Association (CDIA):
“Getting credit reports right for consumers is our most important job and that’s reflected by our industry’s 97+ percent accuracy rate. The industry’s internal data shows no evidence that the increased complaint activity over the last year is a result of a problem with credit reporting. In fact, recent data show that credit scores are rising and are at a record high, despite the pandemic.
We do not believe the complaints in the CFPB database are an accurate reflection of consumers’ experiences with credit reporting agencies. Over the last year, America’s credit reporting agencies have seen an increase in complaints submitted by organizations like credit repair companies. Many of these companies misrepresent their ability to help consumers through unfair, deceptive and abusive practices. They essentially spam the complaint portal, making it difficult to help consumers with legitimate problems.
We strongly encourage the CFPB and the FTC to take real action against predatory credit repair companies. Credit repair scams clog up the database and the credit bureaus’ dispute processes with meritless disputes. The CFPB and FTC should take extensive enforcement action against credit repair companies that rip off consumers and block the waves of complaints that come from the same IP address.
This has been a challenging year for all Americans. Our industry has worked diligently across the financial ecosystem to make sure people have frequent, free access to their credit reports and are able to maintain their financial health as best as possible. At the beginning of the pandemic, Equifax, Experian and TransUnion increased the accessibility for people to check their credit reports weekly for free and have extended that access for an additional year. We strongly encourage consumers to continue to check their credit reports for free every week by visiting www.annualcreditreport.com.”
