Cordray Confirmation Needed to Improve Credit Reporting
By Consumers Union on Thursday, April 25th, 2013
Credit report errors have long plagued consumers, many of whom diligently work to establish a solid credit history, only to find their efforts derailed due to mistakes made by creditors or the credit reporting agencies (CRAs). These lapses have the potential to be truly damaging as more and more companies — from auto, mortgage, and credit card lenders, to landlords, potential employers, and even insurance companies – consult credit reports to make judgments about consumers.
Many consumers have been harmed by significant credit reporting errors, such as when their report includes information from another consumer’s history. For example, Kimberly in Michigan reports to us:
“I continue to experience credit problems due to inaccurate information on my credit report. The credit agencies have another person’s SSN mixed-up with mine and I have been fighting this since 2009. I’m tired of clearing up their error and then having the mix-up appear on my credit report again. This impacts my credit score and affects my credit. I was just recently turned down again for a credit increase with a company that I’ve been a member with since 1998. It takes up to 3 – 6 months to correct their error and in the meantime my credit suffers.”
Unfortunately, these errors are all too common. The Federal Trade Commission (FTC) estimated in a recent report that at least 40 million Americans can expect to have errors in their report. As Kimberly notes, it is often difficult to get the CRAs to promptly fix the mistakes.
That’s why consumers are relying on the Consumer Financial Protection Bureau (CFPB), the consumer watchdog that has oversight authority over the credit reporting agencies, to establish new rules to make sure that the CRAs are taking sensible steps to prevent credit report mistakes and to swiftly fix them when they occur.
However, the CFPB’s ability to carry out its mandate, and work on behalf of consumers, is threatened by a minority of Senators who are working to undermine the Bureau. These Senators have stubbornly prevented the confirmation of the CFPB’s director, Richard Cordray, unless the watchdog is changed in ways that would hurt its ability to safeguard consumers.