The newly-formed Consumer Financial Protection Bureau (CFPB) is questioning whether credit bureaus are doing their part to properly manage credit reports and scores. The agency, which is a layer of regulation created under the Dodd-Frank Wall Street Reform and Consumer Protection Act, is also contemplating whether it should oversee credit bureaus with the same scrutiny as big banks.
CFPB Wants Consumers to Have Complete Picture of Credit History
The CFPB has been inquiring with consumers whether it should take a more hands-on approach to oversee the Big 3 credit bureaus–Experian, Equifax and Transunion–which are known to regulators as Consumer Reporting Agencies (CRAs).
The bureau ultimately wants to make sure that consumers have a complete picture of their credit history. This would mean that consumers understand:
- The method by which scores are calculated
- How borrowing history is tracked
- How to correct wrong information
The bureau says much of this information remains a mystery to many consumers navigating the loan markets. Further, while credit firms do offer educational materials to cover the basics, regulators aren’t sure that it’s enough.
Bureau to Investigate Reporting Issues
The CFPB said it also wants to find a way to bring credit bureaus, consumers and lenders on the same page when it comes to consumer information. Currently, there are a number of issues surrounding the credit system, especially in relation to how consumers access their reports and what information lenders receive. For instance:
- Different scoring models are often used by different agencies, leaving little consistency when it comes to determining scores.
- Lenders and consumers may not use the same credit reporting agency, making it difficult for consumers to know which report to monitor. If consumers choose to monitor all three, the process becomes expensive.
- Data in consumer reports often change between the time the consumer purchases a score and the time the lender obtains the score, making it difficult for the consumer to have an accurate picture of their credit standing.
- Consumers and lenders could access information from the same agency, but pull different information, still giving consumers an inaccurate picture.
The bureau plans to also look into costs consumers pay to acquire their reports and scores to determine whether they’re fair, as well as whether the process of obtaining the reports is simple enough.
The bureau hasn’t yet decided whether it will officially step in to closely monitor credit bureaus, but it says it wants to do what it can to ensure that consumers are being treated fairly in a system where lenders are generally favored. It plans to investigate further then release its findings in a few months.
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“FAIR” credit reporting is a joke in this country! What makes that even worse is the long standing belief that Credit Bureaus are the LAST WORD on your credit!! I am 62 years old and for most of my life have paid cash for everything. My credit is terrible because if I don’t owe a bill….I don’t pay it! I try to correct the problems with the company but in the end they just put the bill on your credit……and POOF you’re ruined!! What kind of a system is that? I should have the right to decide if a bill is correct and owed, not some agency that gets paid for reporting it regardless of errors or evidence! I have tried to work with the credit bureaus and was told that I have to prove that a bill reported on my credit that is actually my ex husbands second wife’s credit isn’t mine!! Now how exactly should I go about doing that? One more issue that I feel warrants mentioning….my social cecurity number was meant solely for my work history and benefits. IT WAS NEVER MEANT TO BE A FORM FOR OBTAINING CREDIT!! God bless American and God help us!