Credit report errors are more common than many consumers think but there are options available. The CFPB is now handling complaints and a consumer protection attorney can help with a FCRA claim.
AMHERST, NY, November 26, 2012 /24-7PressRelease/ — Few things can affect as many opportunities as your credit report. Banks, landlords, student loan lenders, and even some employers all consider consumer credit reports when evaluating applications in New York and around the country. A clean credit report can help consumers get access to the best terms on mortgages, credit cards, and student loans. On the flip side, a lower credit score can cause serious damage.
Some industry observers warn that consumer credit reports often include dangerous errors. In another indication that consumers need to be careful about what shows up on these reports, the federal Consumer Financial Protection Bureau is now making itself available to help people fix mistakes.
While the CFPB can help you clean up a credit reporting company’s mistakes, consumers might have to go a step further to receive compensation for the harms caused by bad reporting.
Watching Out For Your Credit Report
Three major companies dominate the consumer credit reporting industry: Equifax, Experian and TransUnion. While the Federal Trade Commission had authority to enforce laws against the credit reporting companies, no agency could create regulations or inspect how the companies operate.
This changed recently when the CFPB received authority to start taking a closer look at this industry. The CFPB can now regulate all credit reporting agencies that make more than $7 million a year. Around 94 percent of the industry falls within this category, meaning that the CFPB can help watch out for problems in most of America’s credit reporting.
The CFPB also recently took over regulating debt collection agencies to make sure that debt collectors are not violating consumer rights under the Fair Debt Collection Practices Act.
Credit Reporting Errors And What Consumers Can Do About Them
This expansion of regulatory authority over credit reporting companies is happening while consumer advocates are warning about the risk of errors throughout the industry.
Recent studies found big mistakes in consumer credit reports. These groups say that between 30% and 80% of reports include errors. As many as 50% of the mistakes were bad enough to harm a consumer’s financial opportunities.
Consumers have some available tools to help avoid these risks. Everyone is entitled to one free credit report from each of the major three companies every year. This includes EquiFax, Experian, and TransUnion. Consumers can request the reports at AnnualCreditReport.com and the FTC recommends spacing the three reports out over an entire year to keep a frequent eye on changes.
Anyone who finds a potential mistake on their report can now file a complaint with the CFPB. While this allows consumers to clean up credit reporting mistakes moving forward, it does not compensate them for the harms they have already suffered.
Instead, consumers can also pursue a claim under the Fair Credit Reporting Act to receive compensation for financial damages or emotional distress as a result of credit reporting errors.
While credit reporting mistakes can cause significant harm to consumers in terms of both lost financial opportunities and emotional frustration, there are ways to fix mistakes and recover compensation. Credit reporting companies may appear to hold the keys to many of the biggest opportunities in New York. The reality, however, is that they must obey the laws designed to protect consumers’ right to accurate reporting.
Anyone who is concerned about credit report error should consult with an experienced New York consumer protection attorney.