The Washington PostDemocracy Dies in Darkness

Credit bureaus drew more than half of consumer complaints to CFPB in past two years

Placeholder while article actions load

Hundreds of thousands of Americans are assigning a failing grade to the companies that evaluate their creditworthiness.

A new report from the Consumer Financial Protection Bureau reveals that more than half of the complaints the agency has received from the public from January 2020 to September 2021 were directed at Equifax, Experian or TransUnion, the three largest credit reporting firms.

The complaints topped 700,000 during a period that largely overlapped with the coronavirus pandemic and the economic crisis it precipitated.

The CFPB said consumers focused their frustration on automated systems that made it difficult to correct faulty information in their reports; an exasperating dispute process; and surprise debts such as medical bills reported to the companies without their knowledge. And the agency found the credit bureaus provided significantly less help last year when consumers protested, offering relief in 2 percent of cases, down from 25 percent in 2019.

“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” CFPB Director Rohit Chopra said in a statement. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”

The Consumer Data Industry Association, which represents the credit bureaus, said it is reviewing the report and agrees with the federal consumer watchdog that “responding to legitimate consumer complaints and getting credit reports right are paramount.”

“The CFPB report highlights trends including increased activity by certain credit repair companies, which can inflate complaint numbers and undermine the process of addressing legitimate requests,” the industry group said in a statement. “We are committed to continuing to work with the FTC and CFPB to protect consumers against these harmful and abusive tactics.”

The assessments the companies compile carry high stakes: Low scores can disqualify people from housing rentals, home mortgages and credit cards, and cause them to lose out on jobs. For borrowers, lower scores translate into higher interest rates and hence costlier loan payments.

Complaints to the CFPB about the companies more than doubled from 2019 to 2020, according to Consumer Reports. And more than a third of participants in a study by the publication last year found errors in their credit reports.

President Biden campaigned on a pledge to establish a public credit reporting agency that would be housed within the CFPB — an idea originally generated by a joint task force of advisers to Biden and Sen. Bernie Sanders (I-Vt.). Congressional Republicans oppose the plan.