Quick, name the three big credit bureaus. Hint: two begin with
an "E," and all three have veto power over your financial
It's hard to tell the faceless companies apart -- but the way
they handle consumer complaints looks very different.
According to a CreditCards.com analysis of the first year
of complaints on record at the U.S. Consumer Financial Protection
Bureau, there are big gaps in how the big three bureaus -- Equifax,
Experian and TransUnion -- handle gripes.
Equifax says it resolves CFPB complaints in the consumer's favor
62 percent of the time. That compares with a 23 percent
pro-consumer rate at TransUnion and just 12 percent at
But there are some inconsistencies in the numbers, and consumer
advocates doubt that the limited federal figures point to
differences in how mainstream disputes are handled. In the larger
world, "we're just not seeing differences in outcomes," said Randy
Padawer, vice president of credit repair services at Lexington Law,
which works on fixing credit report errors on behalf of
Errors on your credit report can cost you a loan, an apartment
or even a job, so accuracy is important. Under the
Fair Credit Reporting Act
, credit bureaus are required to investigate disputed entries if
you think your report contains a mistake. But the automated system
for checking credit information has been criticized as a
that leaves too many consumers besmirched with bad data.
"People just have terrible experiences with these agencies,"
said David Jones, executive director of the Association of
Independent Consumer Credit Counseling Agencies. "Some people take
four or five years, and they still can't get everything
A fresh look
The CFPB has logged about 12,100 complaints concerning credit
reports since it started tracking the issue in October 2012, and
wrong information was by far the No. 1 gripe. After relaying a
complaint to the relevant company, the agency follows up to see how
the issue was resolved and whether the consumer agrees with the
One goal of tracking the complaints and publishing the data is
to provide more insight into the sources of problems that plague
consumers. Another goal is to prod laggards to improve. On the
surface, it looks like there is room for improvement.
Most complaints are marked "closed with an explanation," meaning
the credit bureau is standing by its guns. But some companies seem
more flexible than others.The differences in how bureaus resolve
complaints mean you are five times more likely to get nonmonetary
"relief" from Equifax than from Experian, and about three times
more likely than TransUnion. Nonmonetary relief means"objective,
verifiable" steps taken by the company to resolve the substance of
the complaint, according to the CFPB's definition.
None of the big three bureaus is big on paying "monetary
relief," commonly known as "money," to kvetchers. Fewer than 1
percent of complaints resulted in a payout. But nonmonetary relief
might be just as welcome, as that would include correcting
information on a credit report.
A closer look at "relief," however, turns up a glaring
inconsistency. Of the consumers who supposedly won their disputes
with Equifax, nearly half told the CFPB they were unhappy with the
company's resolution, the complaint data show, indicating that the
consumers' problems were not fixed to their satisfaction.
Overall, consumers dispute the solutions offered by credit
bureaus more often than other industries, the CFPB data shows.The
dispute rate for the big three overall is 26 percent, compared to
16 percent for bank accounts and just 13 percent for credit
Experts said that the differences in resolution rates for
complaints filed with the regulator probably don't mirror most
people's experience. For an everyday dispute filed directly with
the credit bureau, "exactly the same thing happens at all three,"
said Leonard Bennett, an attorney at Consumer Litigation Associates
in Newport News, Va., who specializes in credit reporting
In a typical dispute, offshore contractors reduce the gripe to a
code number and transmit it to the lender or other source of the
data. The lender checks its records -- usually the same ones that
gave rise to the dispute -- to see that the data being checked
match with the original records and responds with an "all clear" to
the credit bureau, Bennett said. "Of course it's the same," Bennett
The gap in companies' complaint resolutions could be a labeling
difference, where it only looks like a change is being made,
Bennett said. Companies might be putting the "relief" label on
different actions, although the CFPB has provided a lengthy
definition for all companies to follow.
Bennett said that creditors often respond with "modified" data
in a dispute. However, most of the modifications are updates of the
disputed data, not corrections. A similar semantic blurring could
construe a change in the credit report as "relief" when the change
doesn't address the substance of the complaint.
What's more, at least some complaints that arrive via the
federal regulator might be getting special treatment. Credit
bureaus have a
fast track for disputes
filed by lawyers, celebrities and other VIPs, which get hands-on
treatment in the U.S., Bennett said. If some regulatory complaints
are being expedited, that would skew the outcomes.
The role of 'furnishers'
The credit reporting industry says improving the accuracy of credit
reports depends only partly on the credit bureaus. The ball is
largely in the court of the data "furnishers" -- banks, debt
collectors and others who report what bills you did or didn't
"We are working with lenders trying to pull apart the complaints
and see where the issue lies," said Norm Magnuson, vice president
of public affairs for the Consumer Data Industry Association, in an
email response to questions. Representatives of TransUnion,
Equifax and Experian did not respond to questions.
If lenders "don't provide the credit bureaus with the correct
information, it will be wrong in the credit report," Magnuson said.
"If we don't post information to the right credit file, the credit
report will be wrong."
In September 2013, the CFPB issued an order
requiring credit bureaus to pass along supporting
, such as receipts for paid bills, to the source of the negative
information for review. The CFPB order also requires the source to
weigh these materials when checking its records. Consumer advocates
hope this will clear up more complaints, but the September order is
too recent to have an impact on the first year's complaint
"This should help lenders put the consumer dispute in context
and better respond to the issue at hand," Magnuson said.
Complaints: where, what and why
The unhappiest states in the CFPB complaint data were Florida,
Maryland, Nevada and Virginia, each with more than five complaints
per 100,000 people since October 2012. Bringing up the rear were
Wisconsin, West Virginia, South Dakota and Nebraska, each with
fewer than two complaints per 100,000.
People lodged gripes about not getting their free annual credit
reports -- a right under federal law -- problems with services that
are supposed to guard against ID theft, and fears that their credit
report was used improperly by others. But by far the most grumbles
involved disputed information. Errors and error investigations were
the cause of 80 percent of complaints.
The vast majority of gripes were aimed at the big three credit
bureaus. Experian was the subject of 4,497 complaints, compared to
4,013 for Equifax and 2,959 for TransUnion. Other companies,
including lenders, debt collectors and alternative credit bureaus,
also received a smattering of complaints.
Each of the big three keeps files on roughly 200 million
Americans, according to the industry association. So why should the
most complained-about company get 52 percent more gripes than the
least? The CDIA said it did not have enough insight into the
regulatory complaint files to have an answer.
Making more errors would generate more complaints for a company,
but independent studies of the credit files say that's not the
case. In February 2013, the Federal Trade Commission released a
widely cited study of the big three
credit bureaus' record for accuracy and
. It found that 5 percent of reports contained errors serious
enough to cause a higher interest rate, or rejection of a loan
application. What it didn't find was a difference in the frequency
of mistakes from one company to another.
"It's important to remember that the FTC study did not find
differentiation between the bureaus in terms of the quality of the
files," Padawer said.
Padawer said he has seen differences between the bureaus that
could help explain the complaint gap. Experian goes through extra
steps to check your identity when you submit a dispute to guard
against ID theft, he said. Those steps add time to the complaint
response, and that could mean more complaints from impatient
"Perhaps some consumers don't want to go through an extra round
of communication," Padawer said. "Instead, they're going to fly
over to the CFPB site and file a complaint."
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