Bucks Blog: Few Consumers Review Their Credit Reports

Only about one in five consumers review their credit reports each year, according to a new report from the Consumer Financial Protection Bureau.

The three major credit reporting bureaus each have files on about 200 million consumers, mostly containing information provided by credit card lenders. But only about 44 million people obtain their reports annually, based on data from 2010 and 2011, the report said.

“That is a shame,” Richard Cordray, the agency’s director, said in a call with reporters on Wednesday. Examining the reports each year, he said, is the best way to detect and correct errors that can harm a consumer’s credit rating, and he urged consumers to do so. Credit reports are the basis for consumers’ three-digit credit score, which can determine if they get a favorable rate on a loan, or if they get a loan at all.

The report is the latest on consumer credit reporting from the bureau, which is charged with overseeing the credit reporting industry. In October, the agency began accepting complaints about credit reporting firms.

The latest report suggests that many consumers don’t realize they can obtain a free copy of their credit report once each year from each of the three major credit reporting bureaus — TransUnion, Equifax and Experian.

About 16 million people obtained free disclosures from annualcreditreport.com, the Web site that the three big bureaus are required to maintain. By staggering their requests for the reports, consumers can obtain one every four months.

By comparison, 26 million people obtained their reports though various credit monitoring services, which generally require consumers to pay for access to the information.

About one million received copies of their reports directly from the credit bureaus after receiving an adverse decision on an application for credit, and another 500,000 people obtained them in other ways, including fraud alerts or from states where the reports are free by law.

The agency’s report also raised concerns about how effective the bureaus are at resolving consumer complaints about errors they find in their reports. The exact level of inaccuracies in credit reports is in dispute. A report soon to be issued by the Federal Trade Commission is expected to help shed light on that issue, the consumer agency’s report notes.

But the report did note that the credit bureaus resolve only about 15 percent of complaints themselves, and pass the remainder on to the original bank or lender that furnished the data for review. While the complaint is passed along, information mailed in by consumers to help resolve inaccuracies, like written documentation, is often not forwarded to the reporting lender, the report found.

Have you tried to resolve an error in your credit report? What was your experience?

Article source: http://bucks.blogs.nytimes.com/2012/12/13/few-consumers-review-their-credit-reports/?partner=rss&emc=rss