A recent report from U.S. PIRG Education Fund, a consumer advocacy group, found that complaints filed with the Consumer Financial Protection Bureau about credit-report companies nearly doubled between 2021 and 2022. In fact, complaints about problems with credit bureaus totaled 69% of all consumer grievances in the CFPB’s consumer complaint database, U.S. PIRG found.
The Consumer Data Industry Association, a trade group that represents the credit bureaus, attributes the rise in complaints to the rise in credit-repair companies that falsely claim they can remove negative but accurate information from credit reports.
However, in a report released earlier this year, the CFPB said that while consumers continue to report problems with errors on their credit reports, there was a significant increase in resolved complaints in 2022. That suggests many of those disputes were legitimate, says Mike Litt, consumer campaign director for U.S. PIRG.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Be Proactive
The consequences of negative information on your credit report can be far-reaching. You could end up paying higher interest for a mortgage or car loan. You could also have difficulty renting an apartment or, in some cases, getting a job.
Your best defense against inaccurate information on your credit reports is to be proactive. Reviewing your credit reports regularly will enable you to catch errors early. You can review your credit reports from the three major credit bureaus once a week for free by going to www.annualcreditreport.com after a pandemic-era program was made permanent. Make sure you go through this website; other websites that may show up in an online search use the promise of “free” credit reports to charge you for services or, worse, steal personal information.
If you find an error on one of your reports, file a dispute with the credit-reporting company. The CFPB provides instructions and a template letter you can use. You can mail the letter or use the credit bureau’s online form. Explain why you believe the information is incorrect and provide supporting documents if you have them.
Once a credit bureau receives your dispute, it’s required to conduct an investigation and contact the lender. After the lender responds, the credit bureau is required to tell you the results of its investigation. If the lender corrects the error, that should resolve the dispute.
If you’re unable to get a satisfactory response from a credit bureau, file a complaint with the CFPB. “We’ve seen people get relief when they complain to the CFPB when they’re unable to get a resolution on their own,” Litt says.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
What Wall Street's CEOs Are Saying About Trump's TariffsWe're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
The Role of the U.S. Dollar in Retirement: Is It Secure?Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
-
Reminder: The Basics of Using HSA FundsHealth savings accounts (HSAs)can help you cover out-of-pocket medical costs. Just make sure you understand the rules and keep records of qualifying expenses.
-
Why You Need a Trusted Contact for Your BrokerageYour brokerage or bank needs someone to reach out to if it's concerned you're experiencing fraud or cognitive decline. That's where a trusted contact can help.
-
ABLE Account: A Savings Tool to Empower People With DisabilitiesAn ABLE account can improve quality of life for individuals with a disability — it permits tax-free saving for ongoing expenses without jeopardizing benefits.
-
20 Ways to Clean Up Your Finances This SpringSpring cleaning is therapeutic and stops costly problems from building up around the home. Why not tackle the dusty corners of your finances at the same time?
-
Planning Summer Travel? Use These StrategiesTo save money on summer travel, book your tickets well ahead of time, use technology and avoid popular destinations.
-
The 'Concerning Trends' in Retirement NowAmericans are less satisfied with their life in retirement and cite inflation and higher healthcare costs as just two of the problems they're facing.
-
Private Jets Are Within Reach for Wealthy RetireesRealizing an adult fantasy like booking a private jet doesn’t come cheap. But so what?
-
An Inventory of What We’ve Endured: After the WildfiresA traumatic experience like the California wildfires reminds us of other losses we've endured. But simple tasks return us to the present and drive away despair.
