Consumer Reports and WorkMoney call on credit bureaus to ensure reports are accurate and offer tips to consumers who find mistakes
YONKERS, NY — A new joint investigation by Consumer Reports and WorkMoney found that almost half of consumers who recently volunteered to check their credit reports found mistakes in them, with more than a quarter finding serious errors involving debts that could damage their credit scores and limit their financial opportunities. A significant number of the more than 4,000 Credit Checkup participants also reported having difficulty obtaining their free credit reports online. The full Credit Checkup report and analysis is available here.
In response, Consumer Reports and WorkMoney sent letters to Equifax, Experian, and TransUnion and the Consumer Data Industry Association today calling on them to ensure credit reports are accurate and to make it easier for consumers to obtain credit reports safely and securely through annualcreditreport.com. CR has launched a petition to the three major credit bureaus urging them to take these steps.
Credit report errors can include accounts or loans that have been paid off but appear unpaid, individual loans listed multiple times, or debts that are incorrectly reported in collections. Misspelled names, wrong addresses or incorrect birth dates in a credit report can also cause problems for consumers. Other mistakes can be particularly serious like “mixed files” – when information from someone else with a similar name or Social Security number appears in the wrong report or when fraudulent accounts are listed in a report as a result of identity theft.
“Mistakes on your credit report can turn into a major headache with far reaching consequences,” said Ryan Reynolds, financial fairness policy analyst for Consumer Reports. “Credit report errors can make the difference between qualifying for an affordable loan or getting one with a sky high interest rate and can even impact whether you get hired for a job or can lease an apartment. Given how critical credit reports are to our financial lives, the credit bureaus must be held accountable for making sure they are accurate.”
Consumer frustration about errors on credit reports have been the number one complaint submitted to the Consumer Financial Protection Bureau for the past three years and more than doubled between 2021 and 2023 (165,129 in 2021 compared to 430,600 in 2023). Mistakes in credit reports can damage a consumer’s credit score, make it more difficult to verify their identity with the credit reporting agencies, and limit access to affordable credit, employment, housing opportunities, and auto and homeowners insurance.
“Incorrect information on your credit report can lead to very serious consequences and challenges and more money out of your pocket,” said Anjali Sakaria, Chief Advocacy Officer of WorkMoney. “Too many Americans know all too well that removing inaccurate, negative items from your credit report can be tedious and difficult. It shouldn’t be this way. Credit reporting agencies can and should do a better job of investigating and correcting errors on consumers’ credit reports.”
Consumer Reports and WorkMoney launched the Credit Checkup project earlier this year and asked participants to check their credit reports and report what they found by filling out a short survey. More than 4,000 people signed up to participate and completed the survey between February 15-29, 2024. Although the study is not nationally representative, it did find that among the participants, errors happened with alarming frequency:
- 44 percent of those who successfully checked their credit report said they found at least one mistake in their credit reports.
- 27 percent said there were account information errors, such as an account they did not recognize, reports of late or missed payments that the consumer knew had been made on time, and debts that did not belong to the consumer reported as being in collections.
- 34 percent said there were errors related to personal information in their credit reports such as an incorrect name or address.
- 25 percent of the people who initially signed up to participate in the Credit Checkup project were unable to access their credit reports. Some said they couldn’t get past the security questions, while others said once they got into the system, they received error messages.
- 11 percent of consumers who were able to access their credit reports found that it was somewhat hard or extremely hard to do so.
Consumer Reports and WorkMoney recommend a number of steps consumers can take if they find mistakes in their credit reports. CR and WorkMoney are calling on the credit reporting agencies and policymakers to adopt some much needed reforms to improve credit report accuracy:
Strengthen accuracy requirements for credit reports. Credit reporting agencies, data furnishers, and debt collectors must be required to match additional pieces of personal information with a consumer to ensure it is associated with the correct person. If the validity of a debt requires a legal determination, the debt should not appear on a credit report until the furnisher of the information can prove it is valid.
Provide consumers control over their own credit information. Consumers should be able to access their credit reports for free at any time, without being marketed paid services. Consumers should be able to reliably access their reports through AnnualCreditReport.com and compare their reports right on the site, rather than being directed to each credit bureau’s websites separately. The credit bureaus should redesign their identity verification system to ensure consumers are not locked out of their credit reports if they cannot answer a question based on inaccurate or old information.
The dispute resolution process should be improved: Consumers should have the right to appeal the results of disputes. The CFPB should step up its enforcement efforts to ensure that credit reporting agencies and data furnishers conduct thorough investigations of disputes.
Restrict the reporting of medical debt in credit reports. While the national credit reporting agencies have voluntarily agreed not to report medical debts under $500, they should be prohibited from collecting information on medical debts and including it in a consumer’s credit report. The CFPB has found that medical bills have “little predictive value in credit decisions” and “mistakes and inaccuracies in medical billing are common.”
Restrict the use of credit reports and credit scores for non-credit related purposes: Credit reports and credit scores should not be used for practices such as determining insurance rates or for making employment decisions.
Michael McCauley, Consumer Reports, michael.mccauley@consumerreports.org; 415-902-9537
Tiffany Telemaque, WorkMoney, tiffany.telemaque@workmoney.org; 301-802-6270