Credit Scores

The Federal Trade Commission this week released its latest findings in a ten-year study on the accuracy of credit reports. This report is another reminder of how important it is to review your credit report for inaccuracies.

What does this mean to you?

You can check your three credit reports for free once every 12 months at annualcreditreport.com. Dispute any errors, and contact the company that reported the incorrect information to correct it.

For example, if your credit report says that you are 30 days behind on a payment to Bank ZYX, but you’re not actually behind, dispute the error with the credit bureau and also by contacting Bank ZYX directly.

If that doesn’t work, file a complaint with us. You’ll get a confirmation number immediately, email updates along the way, and be able to check the progress online.

What’s in a credit score?

The information in your credit report is used to make a credit score, which translates this great mass of information into a single number that essentially indicates the expected likelihood of repaying a loan on time. Generally, the lower the score, the lower the likelihood you’ll repay a loan on time, compared to other consumers.

How are credit reports used?

Credit reports are used in a wide range of situations – including decisions about whether you can rent a home, and in some states, how much you pay for auto and homeowners’ insurance. Sometimes they’re even used in hiring decisions. Banks, landlords, cell phone providers, and many kinds of other companies rely on the accuracy of this information to make decisions.

What happens if there’s a mistake on my credit report?

A mistake in your credit report can cost you because it can stop you from getting the best rate you’re eligible for any time you borrow money. If there are mistakes on your credit report that make you look bad, then you could be paying more than you should be every month.

Do you have more questions about credit reports and scores or other financial questions? Ask CFPB.

You have the right to know what nationwide specialty consumer reporting companies are saying about you. And you’re entitled to one free report each year, just like with the traditional nationwide consumer reporting companies – Experian, Equifax, and TransUnion. What’s more, nationwide specialty consumer reporting companies have to make it easy for you to get a copy of any file they keep on you – at a minimum, by providing a toll-free number for you to call and order your report. This is an important right, because if you don’t know what’s in those files, you can’t dispute any inaccuracies.

That’s exactly what we said to nationwide specialty consumer reporting companies in a bulletin we sent out today. Under federal law, they must give you an easy way to get a free copy of your report every 12 months.

So what exactly are nationwide specialty consumer reporting companies and how do they affect you?

These are companies that collect information on a nationwide basis about medical records or payments, residential or tenant history, check-writing history, employment history, or insurance claims. Like the three largest nationwide consumer reporting companies (Experian, Equifax, and TransUnion), they gather and report information about you to creditors, landlords, insurance companies, employers, and others.

You can order reports – including your annual free reports – from Experian, Equifax, and TransUnion at annualcreditreport.com – and we recommend that you check your report with each company at least once per year. But you will have to order the specialty consumer reports individually from each reporting company.

To help you access specialty and other consumer reports, we created a list of approximately 40 companies, with the companies’ websites and toll-free telephone numbers. The type of information collected may vary by the company and its specialty industry.

The list includes both the three largest nationwide consumer reporting companies and a longer list of other companies that have identified themselves as consumer reporting companies or provide consumers access to their consumer reports. Not all companies are required to provide a free copy of your annual report, although under federal law all consumer reporting companies must provide you with a copy of your report for a reasonable fee. Please consult the list for further details.

You may not need to check with every single specialty company on the list. Different companies collect information about different things: your medical records or payments, residential or tenant history, check-writing history, employment history, or insurance claims. Many may not even have any information about you. But you may want to check with some or all of these companies:

• If you were a victim of identity theft or think someone may have fraudulently cashed checks using your bank account.
• Before applying for insurance.
• Before applying for a lease.
• If you’ve applied for a new job and your potential new employer asks for your written authorization to get a report.

Tip: Look for and fix mistakes. Errors in your consumer reports, or fraud caused by identity theft, can make borrowing more expensive, or prevent you from getting credit, insurance, a lease, or a new job.

You’ll also want to make sure the information is up to date.

SUBMIT A COMPLAINT

You can now submit complaints about consumer reporting agencies to us.
If you believe that there’s incorrect information on your consumer report, start by filing a dispute with the consumer reporting company and getting a response directly from the credit reporting company itself. You can also file a dispute with the company that furnished the information to the consumer reporting company.

After you file a complaint with the consumer reporting company, if you are dissatisfied with the resolution, file a complaint with us.

RELATED RESOURCES

Check your credit report at least once a year.

Ask CFPB for more information about credit reports and credit reporting companies.

You may know about the three biggest nationwide credit reporting companies: Experian, Equifax, and TransUnion. But did you know that there are other companies out there that may be providing reports on you that could be used to decide if you’re eligible for consumer financial, insurance, medical and other products?

Today the CFPB is posting a list of consumer reporting companies – companies that collect information and write reports that could be used to decide if you will be able to get credit, insurance, or a job. This list doesn’t cover every company in the industry. It’s a list of companies that have identified themselves as consumer reporting companies or provide consumers access to their consumer reports. (1) The list includes both the biggest nationwide credit reporting companies and a longer list of “specialty reporting companies.”

Specialty reporting companies focus on certain industries. Just like the three biggest nationwide credit reporting companies, specialty reporting companies collect and share information with creditors and other businesses. There are a lot of these companies on the list, so we’re also trying to give tips on which of them may be important to you. The list also has information about how you can get copies of your reports (see below).

So we encourage you to take a look at the list of companies and think about which ones might be reporting on you. It’s important to ask for your report from those companies so you can correct any mistakes or see whether anyone’s been trying to hijack your identity. For example, if you’re going to rent a new apartment or home, ask the landlord what tenant background company they use, if any.

You can access the list here. Keep the following in mind:

• You should check your reports from at least Experian, Equifax, and TransUnion every year, which you can do for free at AnnualCreditReport.com.
• The list includes information on companies that will provide free reports.
  • Just like the biggest credit reporting companies, there are nationwide specialty reporting companies, and they have to give you one free report every 12 months, upon request.
  • Additionally, consumer reporting companies will provide a free report “>if an adverse action has been taken against you based on information in your report or under other specific circumstances.
• You may not need to check with every single specialty company on the list. Many may not even have any information about you. But you may want to check with some or all of these companies:
  • If you were a victim of identity theft or think someone may have fraudulently cashed checks under your bank account;
  • Before applying for insurance;
  • Before applying for a lease;
  • If you’ve applied for a new job and your potential new employer asks for your written authorization to get a report.
  • The type of information collected may vary by the company and its specialty industry.
• You have to request the reports individually from each reporting company. Different companies collect information about different things: your medical records or payments, residential or tenant history, check-writing history, employment history, or insurance claims.

You’re welcome to read through the entire list top-to-bottom. We’ve also arranged it by specialty, and you can follow links from the first page to the appropriate section of the list. The list covers the following specialties:

• Nationwide Credit-Reporting Companies
• Specialty Reporting Companies:
• Check screening and check history
• Payday lending reports
• Auto and property insurance history
• Alternative/supplementary credit reports
• Utilities
• Rental history
• Medical
• Employment/background

If you have information about this list that you’d like to share with us – for example, if you work for a specialty reporting company that’s not on this list and should be – please email us at CFPB_Specialty_Reporting@cfpb.gov. For tips on keeping a good credit score and managing credit, explore Ask CFPB and the CFPB’s blog.

1. This list includes entities that have identified themselves as consumer reporting companies or particular types of consumer reporting companies or have indicated when they provide consumers access to their consumer reports. The list incorporates information from the companies’ own self-descriptions that has not been independently verified by the Bureau. It is not intended by the Bureau to be an all-inclusive list, nor does it reflect any determinations by the Bureau as to whether any particular entity is or is not subject to the Fair Credit Reporting Act or any part thereof or complying with it. Furthermore, presence on or absence from the list does not indicate whether the consumer reporting company is subject to the CFPB’s supervisory authority.

For the first time, consumer reporting agencies will be subject to a federal supervision program. Earlier today, we held a field hearing today in Detroit for the announcement with remarks from Richard Cordray, CFPB Director, as well as testimony from consumer groups, academics, industry representatives, and members of the public. Director Cordray said:

[The credit reporting] system must merit our trust and confidence for the credit markets to be perceived as fair. We all share in this responsibility. But the credit reporting market is not one where consumers can shop around among different providers, for people have no choice about whether to have any of the credit reporting companies keep track of their credit history. That is why the Consumer Bureau’s new authority is so important, and why it must be exercised carefully and effectively.

Archived footage is available below. You can also read Director Cordray’s full remarks right now.

More on credit reporting

See the rule that establishes our consumer reporting supervision authority.
Read a consumer advisory on checking your credit score.
Find a credit reporting company that specializes in a particular area like medical history, employment history, etc.
Tell us your story about credit reporting.
Tweeting about the event our our announcement? Use #CreditReporting.

Video coverage of today’s event

Video streaming by Ustream

We invite you to participate in a field hearing in Detroit, Michigan on credit reporting.

The field hearing will take place on Monday, July 16, 2012, at 11:00 am in the Detroit Institute of Arts, 5200 Woodward Avenue, Detroit, Michigan.

The field hearing will feature remarks from Richard Cordray, CFPB Director as well as testimony from consumer groups, academics, industry representatives, and members of the public.

This event is open to the public and requires an RSVP. To RSVP, email your full name and your organizational affiliation (if any) to cfpb.events@cfpb.gov.

Credit scores are important for consumers. They affect the rate of interest on a mortgage, credit card, or auto loan and can even play a role in whether you get auto or homeowners insurance. We have created a printable advice sheet on how you can get and keep a good credit score. To learn more, see the report we issued last week examining the differences between credit scores sold to consumers and scores used by lenders to make credit decisions.