What’s Wrong with the Credit Reporting System

What’s Wrong with the Credit Reporting System On September 10, 2014, the House of Representatives SubCommittee on Financial Institutions and Consumer Credit heard testimony on the current state of the consumer credit reporting system. Mr Stuart Pratt, who is with the industry trade association, the Consumer Data Industry Association, testified that all was well with the system, except that there are too many class actions against his member companies. Ms Chi Chi Wu, an attorney with the National Consumer Law Center, testified that the credit reporting system is neither fair nor completely accurate and as a result tens of millions...

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The Impact of Foreclosures & the Rescission on Consumers’ Credit Records

The Impact of Foreclosures & the Rescission on Consumers’ Credit Records As everyone knows, foreclosures and accompanied recession caused tremendous economic damage affecting millions of consumers. These events have adversely affected the credit standing of millions of our citizens. The National Consumer Law Center has published an excellent report describing the problem and what should be done to mitigate the problems. Consumers who lost their homes due to foreclosure inevitably end up with a report of a foreclosure on their credit reports. These reports knock their credit scores down by 100 to 150 points. Even when a homeowner avoided foreclosure...

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Consumer Agency Finds the Credit Bureaus’ System of Dispute Resolution Does Not Work for Consumers

The Consumer Financial Protection Bureau has released a study of the operations of the three national credit bureaus. The CFPB found serious problems with the credit reporting system, and in particular, the dispute system.The bureaus’ automated dispute system in which the credit bureau often limits its role in disputes to little more than assigning codes as to what type of dispute is at issue. The bureaus do not examine documents, contact consumers by phone or email, or exercise any form of human discretion in resolving a dispute. The vast majority (85%) of credit reporting disputes are passed on to the...

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CFPB to Begin Regulating Credit Bureaus

On September 30, 2012, the Consumer Financial Protection Bureau (CFPB) will begin regulating the largest credit reporting agencies. Speaking for the National Consumer Law Center, Ms Chi Chi Wu said, “The fact that the CFPB will oversee the large credit reporting agencies is a game changer” and the CFPB “could potentially improve the economic lives of millions of Americans by improving the accuracy of the system and its responsiveness to consumers.” The three national credit bureaus have credit information on about 200 million Americans. The reports are the basis for consumers’ all-important credit scores. Credit reports and scores have a...

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Report on How Errors in Criminal Background Checks Hurt Workers

This month, the National Consumer Law Center issued a report on problems with companies that offer criminal background checks to employers. Over 90% of employers now run such checks on some employees and 73% run checks on all potential employees. The Internet has facilitated the means by which hundreds of companies offer criminal background checks using data purchased from cities, counties and states. One company’s website brags it has 345 million criminal records available. About sixty-five million adults in the US have some sort of criminal record. The number one problem is that the data often has incorrect information leading...

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