TransUnion, Equifax, and Experian are the three biggest consumer credit reporting agencies in the country. Whenever someone wants to check their credit score, they will almost certainly turn to one of these three companies to get it done. Indeed, if a landlord has a question about a tenant, an insurance company has concerns about a policyholder, a bank has reasons to doubt the stability of a loan applicant, or an employer is on the verge of hiring a worker or not, TransUnion Equifax, and Experian are nearly-guaranteed to run the check using a massive storehouse of consumer information and report back.
However, the size of an agency does not promise anything about its legitimacy, thoroughness, or fairness. The Consumer Financial Protection Bureau (CFPB) reports that the most consumer complaints in the country are filed against those three industry giants. In fact, nearly 40,000 consumer complaints each year will be filed against TransUnion, Equifax, or Experian, and 32,000 of those are due to inaccuracies and misinformation on credit reports that landlords, employers, and more take quite seriously.
Credit Reports Can Change Lives, For Better or For Worse
People can find gainful employment or stay out of work and in dire financial straits due to a credit report. Banks can approve a loan for a new home and a new lease on life, or deny them flatly due to a credit report. Insurance companies can set low monthly premiums, or skyrocket them all due to a credit report. No matter how the situation is approached, a credit report is hugely influential in today’s society, and a single error is inexcusable and potentially catastrophic.
With all of this said, there is not much relief to be found when considering the track record of credit score reporting agencies. The Federal Trade Commission (FTC) found in 2012 that a quarter of all credit reports were erroneous, and that 1-in-20 had errors significant enough to likely cause, or that had already caused, serious issues for the individual consumer. A 5% to 20% failure rate in any other industry is totally unacceptable, so why is it the norm when it comes to credit scoring agencies?
Legislation & Lawsuits May Hold the Answer
Credit reporting agencies are not only recently making egregious mistakes. The problem has been ongoing for basically as long as they have been around. In the past, lawsuits have been successfully thrown at these companies to get in gear, correct mistakes, and implement improved processes to ensure they do not occur again in the future. Lawmakers are also staring down the challenge of creating legislation that would control credit reporting processes, but much of it has stalled in either the House or Senate.
(You can get more information about this ongoing issue by clicking here and reading a full article posted by The Washington Post.)
For the time being, the right way to protect yourself from economic, societal, and professional harm caused by an erroneous credit report might be to file a lawsuit to dispute it. If you have asked a credit reporting agency to correct a mistake and they have refused, contact Atlas Consumer Law and talk to our Chicago consumer attorney about your options. With our experienced and highly-rated lawyers by your side, you may be able to correct the situation or fight for compensation for real damages related to a mistake in your credit report.