Consumer Reports and WorkMoney launch Credit Checkup project to encourage consumers to check their reports for credit-damaging errors
YONKERS, NY – Consumers should check their credit reports carefully to make sure they don’t contain errors, as complaints about mistakes on these critical reports continue to be the top complaint submitted to the Consumer Financial Protection Bureau, according to a new analysis by Consumer Reports. Consumer complaints about credit reports accounted for almost half of all complaints submitted to the CFPB in 2023. CR found that complaints about incorrect information on reports have increased by more than two and a half times since 2021.
CR is teaming up with WorkMoney, a national nonprofit dedicated to raising incomes and lowering costs for Americans, to launch the Credit Checkup project to help consumers review their credit reports and provide guidance on what to do if they find errors. Consumers can sign up for the project at cr.org/creditcheckup and will play a key role in a people-powered research project by filling out a brief survey to report on their experience. CR will analyze that data for an upcoming report on what consumers found and to make the case for needed reforms. Keeping an eye out for credit report errors has gotten easier now that the major credit bureaus have agreed to give consumers free access to their reports every week at annualcreditreport.com.
“Millions of Americans have errors on their credit reports, which can do serious lasting damage to their financial prospects,” said Ryan Reynolds, financial fairness policy analyst at Consumer Reports. “Mistakes on your credit report can stand in the way of getting an affordable interest rate on a loan or could mean you’ll pay more for car or homeowners insurance. Credit report errors can even prevent you from getting hired for a job or being able to rent an apartment. Given how common credit report errors can be, it is critical for consumers to check their reports regularly to make sure they are fair and accurate.”
Consumer complaints have risen dramatically: Consumer Reports analyzed consumer complaints submitted to the CFPB in 2023 and compared that data to previous years and found:
- Consumers submitted twice as many complaints about credit reporting in 2023 compared to 2021 (644,839 versus 307,553).
- Credit report complaints made up almost 50 percent of all complaints submitted by consumers to the Bureau last year.
- Complaints about mistakes on credit reports increased by more than two and a half times (168 percent) over the last two years (443,321 in 2023 versus 165,129 in 2021).
- The CFPB received more complaints about incorrect information on credit reports in 2023 (443,321) compared to similar complaints during the previous two years combined (165,129 in 2021 and 229,634 in 2022)
“Most Americans don’t realize how errors on their credit report can impact their everyday life. A mistake can have a devastating effect on everything from their ability to rent an apartment or to apply for a job,” said Anjali Sakaria, Chief Advocacy Officer of WorkMoney, whose organization will encourage its nearly 6 million members to participate in the Credit Checkup survey. “Given how critical these reports are to our financial lives, it’s time for the credit reporting agencies to step up their efforts to ensure they are accurate and free of credit damaging errors.”
Common credit report errors include accounts or loans that have been paid off but appear as unpaid, individual loans listed multiple times, and debts that are incorrectly reported in collections. Even a wrong address or birth date on a credit report can get consumers into trouble. 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.
Advice for consumers: If you find mistakes on your credit reports, CR recommends taking the following steps:
- File a dispute with each major bureau: The three major credit bureaus – Experian, Equifax, and TransUnion – don’t communicate with one another, so it’s smart to contact each one. Filing a dispute with each credit bureau, instead of the lender or bank, offers protections governing how quickly it must be handled. It also provides a legal pathway to sue the credit bureaus and creditors or collectors, if necessary.
- Include all evidence: If you are filing a dispute about debt that’s reported incorrectly, include account statements or payment records. Credit bureaus can dismiss claims without enough backup information as “frivolous.” And resubmitted claims can be denied if they’re considered similar to previous ones.
- Create a paper trail: Write a letter explaining the problem. Need some help? The Federal Trade Commission has a sample letter you can use to file a dispute. Avoid using standardized online forms provided by the credit bureaus, which might oversimplify your dispute by requiring you to choose among predetermined check boxes. Plus, by submitting your dispute online, you could unwittingly waive your right to sue as an individual or in a class action.
- Send all materials by certified mail: Keep copies for yourself. This makes it easier to confirm that the credit bureaus follow the lawful timelines. Credit bureaus have five days to get the disputed information to the financial institution or debt collector that supplied the information. If that company doesn’t investigate and respond to the dispute in time, the credit bureaus are legally required to delete the information.
- If you lose your dispute, file a complaint with the CFPB: Fill out the CFPB form and explain your situation, and attach all correspondence and financial documentation you have to support your dispute. The CFPB says they get most companies to respond within 15 days, although they have 30 days to do so.
- Consider working with an experienced attorney: You can sue a credit bureau or financial institution over credit report errors. Find an attorney through the National Association of Consumer Advocates at consumeradvocates.org
Michael McCauley, Consumer Reports: Michael.mccauley@consumer.org, 415-902-9537 Kate Brickman, WorkMoney: workmoney@dkcnews.com, 815-343-9299