More Than a Third of Volunteers in a Consumer Reports Study Found Errors in Their Credit Reports

TransUnion’s mistake meant she didn’t qualify for a low-interest rate at the car dealership. “Instead, they gave me a 12 percent rate, which would have increased my monthly payment by more than $100,” Ross says. “I’m on a fixed income, so every dollar counts.”

What’s more, consumers reported often facing roadblocks correcting errors or even just accessing their reports. 

As the post-pandemic economy sputters back to life, and through no fault of their own, the broken system can mean consumers have valuable opportunities denied to them, says Syed Ejaz, the financial services policy analyst at CR who conducted the study. “The American dream of owning a home or getting an education or even a job is at risk for those who find errors in their reports and struggle to get them corrected,” he says. 

The large number of errors that CR volunteers, including Ross, found in their reports is a “real sign that the credit reporting system is failing American consumers,” says Amy Traub, associate director at Demos, a policy and research organization, where she focuses on consumer financial issues. “Credit reporting is part of our public infrastructure—a necessity for consumers who want to participate economically. But three private companies have all the power over our financial destinies.”

When asked about CR’s findings, Francis Creighton—president and CEO of the Consumer Data Industry Association, the trade association that represents the credit bureaus—challenged the results. 

“We strongly caution against drawing conclusions from non-empirical surveys of consumers, such as this,” Creighton says. “The credit reporting industry takes data accuracy extremely seriously, and improvements to the system cannot be achieved by relying on questionable and skewed data studies.” He also says that the “CDIA and our members are proud of our high accuracy rates” and that “we are committed to continually improving the accuracy of credit reports.”

CR’s recent analysis is not the only evidence of a high rate of errors in credit reports. A nationally representative survey conducted by CR in January 2021 (PDF) of 2,223 adults found that 12 percent of people who had ever checked their credit reports said they found errors, with 57 percent able to get their errors corrected after filing a dispute. And the Consumer Financial Protection Bureau, the federal agency tasked with protecting Americans from deceptive financial practices, reports that credit report errors are common—and the number reported to the agency more than doubled between 2019 and 2020.   

Beyond outright mistakes, CR’s volunteers identified other troubles, too. One particularly irksome one: security questions that are too difficult to answer or that are based on outdated or incorrect information, which can block or delay access to the reports. 

Others said that they sometimes had to provide credit card information or that they inadvertently signed up for credit-monitoring services costing close to $30 per month. And canceling those services and getting refunds was often complicated and time-consuming.  

Here we’ll explain what other consumers like Ross faced, and what you can do if you find errors in your own report.

Credit bureaus have turned to requiring such detailed information in part because that is more secure than asking about, say, your mother’s maiden name, says Ed Mierzwinski, senior director of the federal consumer program at  U.S. PIRG, a policy and research organization, and a CR board member. “But who remembers how much their mortgage payment is, or which bank serviced your mortgage 10 years ago, because they get moved around so often?”

Worse, sometimes the security information you are asked about is based on inaccurate dasuta in your report, according to several volunteers. For example, Lori Vann-Guthrie of Dallas-Fort Worth says TransUnion wouldn’t provide online access to her report. “I answered the questions correctly, but because it didn’t match the wrong information they had on file, they wouldn’t allow me to access my credit report.”

A CFPB spokesperson confirmed that “it is not an uncommon problem” for consumers to report being locked out of their credit reports because of problems answering security questions.

Robin Singletary, a study participant from Wenatchee, Wash., said he had a similar experience after being locked out of his Equifax report and then trying with TransUnion, where he accidentally signed up for a monthly service that charged him about $25 for the first month. “I immediately canceled the subscription and had to call the helpline to get this charge removed from my card,” he says. 

Mierzwinski at U.S. PIRG says credit bureaus take advantage of confused consumers. They “not only put the burden of monitoring reports on customers’ shoulders, but then they charge them for accessing their own information,” he says. “Basically, the companies have turned their own failures into a business model. You have to pay to do the work for them.”

If that doesn’t work, you can file a complaint on the CFPB’s website to get your situation investigated, though it’s unclear how long that could take. 

If the problem is severe or vexing enough, consider hiring an attorney experienced in federal consumer credit law to further press your claim in court against the credit bureau or financial institution. The Fair Credit Reporting Act gives consumers this right. And know this: If a company is found in violation, your legal fees might be automatically covered. Most law firms won’t require payment up front to review your case. 

Find an attorney at the National Association of Consumer Advocates website. In cases of identity theft you have additional rights, including the right to obtain detailed documentation about accounts improperly opened in your name.

Editor’s Note: This article was updated to remove conflicting language indicating that Victoria Ross’ refund was still in progress.