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Consumer Reports calls on Congress to fix our broken credit reporting system at House Financial Services Committee hearing

CR’s recent investigation found credit report errors are all too common 

WASHINGTON, D.C. – Syed Ejaz, financial policy analyst for Consumer Reports, will testify today at a House Financial Service Committee hearing on the need to protect consumers from costly mistakes on their credit reports and enact other reforms to make the credit reporting system more responsive to their needs. Earlier this month, CR released an investigation finding that more than one-third of the volunteers who recently participated in its Credit Checkup project found mistakes in their credit reports.

NOTE: The House Financial Services Committee hearing is scheduled for 10 am EDT today and can be viewed online.

“Credit reports play a central role in the financial lives of all of us so it’s critical that they are fair and accurate,” said Ejaz. “All too frequently, consumers find mistakes in their credit reports that can limit their financial opportunities and can be difficult to correct. Congress should adopt reforms that give consumers more control over their credit information, make it easier to access credit reports and scores for free, and strengthen standards to improve credit report accuracy and fix mistakes.”

Consumer Reports supports the Protecting Your Credit Score Act, which requires stronger data matching requirements and creates a secure portal where consumers can freeze their credit, file disputes, and check their reports for free an unlimited number of times.  In addition, CR has endorsed the Comprehensive CREDIT Act, which gives consumers the right to appeal the results of credit report dispute investigations, and restricts the use of credit reports for employment among other reforms.

Complaints about credit reporting errors have remained among the most frequent submissions to the Consumer Financial Protection Bureau and have more than doubled since 2019. Mistakes in credit reports can damage a consumer’s credit score, make it more difficult to verify their identity with the credit bureaus, and limit access to affordable credit, employment, housing opportunities, and auto and homeowners insurance.

Earlier this year, Consumer Reports launched the Credit Checkup project and asked volunteers to check their credit reports for accuracy and report what they found by filling out a short survey. Of the nearly 6,000 volunteers who participated, 29 percent found personal information errors in their credit reports such as a wrong name or address.  Eleven percent of the volunteers found account information errors, with the most common being accounts appearing in their credit reports that they did not recognize. Some volunteers reported having difficulty obtaining their free credit reports online, while others said they were unfairly charged for services.

CR’s recent analysis is not the only evidence of consumers finding troubling errors in credit reports. A nationally representative survey conducted by CR in January 2021 of 2,223 adults found that 12 percent of people who had ever checked their credit reports said they found errors. In 2012, the FTC found that 21 percent of consumers had at least one verified error on their credit reports, and that five percent had errors that could make them pay more for products such as a car loan or insurance.

Michael McCauley, michael.mccauley@consumer.org, 415-902-9537