Corey Stone, the assistant director of the CFPB’s division of deposits, cash, collections and reporting markets, presented on Tuesday the agency’s latest study on credit report accuracy before the Senate Committee on Commerce, Science and Transportation.
Last December, the CFPB issued a report based on information provided by the three major credit reporting agencies, including Equifax, Experian and TransUnion, as well as their industry association.
The report focused on three areas that affect credit report accuracy: how creditors and debt collectors provide information to credit reporting companies, how credit reporting firms screen incoming data and match it to consumer files and how credit reporting firms handle consumer disputes.
The report found that more than 75 percent of credit reporting companies’ trade lines come from the top 100 providers of information, most of which are large bank and non-bank financial services providers under CFPB supervision.
Additionally, the report found that only approximately 20 percent of consumers look at their credit reports each year, meaning many consumers could have incorrect information on their reports.
The report also found that most consumer disputes are forwarded to the original information furnishers, but the accompanying documentation submitted by consumers may not be sent to furnishers, which means they cannot properly investigate or report back to the credit reporting company.
“Our report’s three areas of focus – accuracy of the information received by the credit reporting companies, how they assemble and maintain that information, and the processes that govern error resolution – are just a start,” Stone said. “They are the obvious and essential basics. As we learn more about the credit reporting system from consumers, from the supervised firms, and from others, we will adapt and adjust to ensure that it meets the Fair Credit Reporting Act’s aspiration of treating consumers fairly and equitably.”