But consumer advocates say the reports from Equifax, Experian, and TransUnion should be free permanently
Consumer Reports calls on credit bureaus to make free credit reports a permanent benefit for consumers.
By Lisa L. Gill
Update, Sept. 23, 2022: The thee major credit bureaus have now extended free weekly credit reports through 2023.
Original article: The three major credit bureaus, Equifax, Experian, and TransUnion said in a joint statement that they will continue to offer consumers free credit reports on a weekly basis until April 20, 2022, because of the ongoing COVID-19 crisis. Before the pandemic, credit bureaus by law had to provide a single free report annually, and could charge you about $20 each additional time you needed one.
The still-present need for consumers to have the key to their financial information is the reason for the extension. “None of us could have foreseen that the pandemic situation would last longer than a year,” Frances Creighton, president and CEO of the Consumer Data Industry Association, which represents the three credit bureaus, told CR.
Credit reports, which show whether you made on-time mortgage, credit card, auto loan, or student loan payments, are used by lenders to determine whether you’re a good credit risk. Even potential landlords, cellular service providers, and employers can review your report with your permission.
The information in them is also used to calculate your credit score, that three-digit number that is meant to represent your creditworthiness.
Because changes in the report can happen almost daily, getting a free report on a regular basis can help consumers monitor their information, says Syed Ejaz, a financial policy analyst at Consumer Reports.
Consumers can obtain copies of each of their reports via the AnnualCreditReport.com portal.
The credit reporting industry’s move comes on the heels of an unprecedented wave of consumer complaints made to the Consumer Financial Protection Bureau over errors found on credit reports, Ejaz says.
According to CR’s recent analysis of the CFPB’s complaint database, problems around credit report errors accounted for almost two-thirds of total complaints in 2020—up 23 percent from a year earlier.
In fact, more people complained last year about the credit bureaus than they did about perennially problematic debt collection firms, says Ed Mierzwinski, senior director of federal consumer affairs program at U.S. PIRG, a consumer advocacy and policy organization. Problems with debt collectors were just 12 percent of complaints the CFPB collected last year.
Errors are common: A 2012 Federal Trade Commission report found that up to one-quarter of credit reports contain at least one mistake. A CR nationally representative survey of 2,223 U.S. adults in January 2021 (PDF) found that 12 percent of Americans who have ever checked their credit report say they found at least one error in their report the last time they checked.
Errors can include everything from incorrect address information to more serious problems, such as loans that are listed multiple times, paid-off loans that appear as still open, or information about other people’s accounts that show up on your report, Ejaz says.
In a separate CR panel of consumers last year, participants described a range of mistakes on their reports: One man discovered his mortgage was listed twice—something his bank promised to fix but hadn’t after months. Another said his report showed his son’s account information. Yet another learned an unpaid cable bill had gone into collections in Georgia—a state that person had never lived in.
All such errors can negatively affect a person’s credit score, Ejaz says.
Errors could be a particular problem for people who deferred loan payments with lenders or credit card companies, says Bruce McClary, a senior vice president at the National Foundation for Credit Counseling, a nonprofit organization that helps consumers rebuild their credit.
The Coronavirus Aid, Relief and Economic Security Act, passed last May, required companies providing federally backed mortgages and student loans to offer deferrals while still reporting to a credit bureau that the loan is current. Voluntarily, some credit card companies and auto lenders also offered deferrals. But in some cases, deferred loan payments were still reported as being late—all the more reason to keep a close eye on your credit information, Ejaz says.
Making Credit Reports Free Forever
Some consumer advocates believe credit reports should be permanently free. “There is no good reason consumers should be charged at all to access their own data,” Ejaz says.
“There’s nothing I can think of that would legally or logistically prevent the Big Three credit bureaus from making free weekly reports permanent,” says Chi Chi Wu, an attorney at the National Consumer Law Center who focuses on consumer credit issues.
CR advocates yesterday called on the credit bureaus to make free credit reports permanent and to take steps to improve the accuracy of credit reports. One potential fix, Ejaz says, is for the agencies to ensure that any supporting documentation a consumer submits in an automated dispute filing is also considered in the bureau’s review of their case.
“Credit bureaus are supposed to look at all accompanying documents when a consumer files a dispute, but they very often don’t,” Ejaz says. That’s because the task of reviewing disputes is often outsourced, and the bureaus typically accept the results of the outsourced investigation without questioning the accuracy of the findings, he adds.
Another way to avoid errors, Ejaz says, is for credit bureaus to be required to ensure that all nine digits of a Social Security number associated with a payment or loan match the Social Security number on a person’s credit report. Currently, bureaus typically match only seven of the nine digits, Wu says.
How to Dispute Errors in a Credit Report
File a dispute with each of the three credit bureaus. That’s because Equifax, Experian, and TransUnion are separate companies that don’t communicate with one another.
Send a letter via certified U.S. Postal Service mail. And keep copies for yourself. The idea is to create an old-fashioned paper trail, to make it easier to confirm that the credit bureaus follow the lawful time lines. Avoid filing disputes online, experts says, because often credit bureaus have standardized forms that might force you to oversimplify your situation.
Include any evidence. Account statements or information on payments made can protect you from a credit bureau dismissing your claim because of a lack of sufficient backup information. If you resubmit a claim with the evidence later on, it can be denied if the claim is considered similar to previous ones.
If your dispute is denied, consider hiring an experienced attorney to file suit. The Fair Credit Reporting Act provides consumer protections around lawsuits against credit bureaus. If a company is found to be in violation of FCRA law, your legal fees will be covered.
Consider adding a personal statement to your report. You can do this at any time, and doing so can be help explain your situation to a potential lender. McClary says banks and other institutions will typically read and consider these while making a decision about your creditworthiness, and having one can be a good idea, especially if you’ve lost a dispute and have a negative item that remains on your report.
Did you win your dispute? Ask the bureau to send out updated credit reports. These go to anyone who has checked yours in the past six months, if you request it.
Participate in a CR Research Project
Given the record number of consumer complaints about credit reports, CR teamed up with a group of consumer organizations to launch the Credit Checkup project. As part of the project, you’ll review your report and fill out a brief survey to let us know what you find.
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