We Deserve A Better Credit Reporting System | Local company

American Express, Visa and Master Card on display in Richmond, Va. On Thursday, July 1, 2021. US consumer borrowing jumped $ 35.3 billion in May as Americans, buoyed by the reopening of the economy and rising employment levels have started to use credit again in a big way. Credit card, auto and student loan borrowing posted strong gains in May, the Federal Reserve reported on Thursday, July 8, 2021 (AP Photo / Steve Helber, on file)

Steve helber

By LIZ WESTON from NerdWallet

In some ways, the American credit reporting system has improved. Credit freezes, which lock our credit information to deter identity theft, are now free and fast. We have free weekly access to our credit reports, courtesy of Equifax, Experian and TransUnion credit bureaus, until April 20, 2022. Free credit scores provided by banks, credit card issuers and others companies make it easy for us to monitor for signs of fraud and other issues.

Unfortunately, our credit information is still not as accurate, easy to obtain, or secure as it should be. These failures mean that Congress and regulators must intervene.

Errors abound in credit reports

A 2012 Federal Trade Commission study found that 26% of consumers had an error on at least one of their credit reports, while 5% reported inaccuracies serious enough to potentially trigger interest rates or premiums. higher insurance.

Nine years later, accuracy is still an issue. Earlier this year, Consumer Reports recruited nearly 6,000 volunteers to check their reports. The results: 34% found at least one error or account they did not recognize. (Unlike the longer-term FTC study, the Consumer Reports effort was not a representative sample of the population, says Syed Ejaz, political analyst and author of the Consumer Reports study.)

There just aren’t enough incentives for the credit bureaus to do it right. Their main clients are financial institutions that can profit if someone who is creditworthy is charged a higher rate because of an error, says freelance journalist Bob Sullivan, author of “Your Evil Twin: Behind the Identity Theft Epidemic “.

Source link

Comments are closed.