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The Facts About Credit Report Accuracy

Written by Equifax Experts on February 21, 2013 in Credit  |   20 comments

In light of recent discussions and misinformation reported in the news media regarding credit report inaccuracies and the difficulty in correcting them, we would like to provide our perspective and highlight some important facts. Credit reporting agencies have a very simple but challenging goal with…

the-facts-about-credit-report-accuracyIn light of recent discussions and misinformation reported in the news media regarding credit report inaccuracies and the difficulty in correcting them, we would like to provide our perspective and highlight some important facts.

Credit reporting agencies have a very simple but challenging goal with regard to accuracy of consumer credit files: we want perfection. It is important that our data is accurate, so that lenders can make a more accurate assessment of consumer risk.

The Consumer Financial Protection Bureau (CFPB) looked at the issue of credit accuracy last December and reported that between 1.3% and 3.9% of consumers disputed information in their credit report. Another recent study by the Policy and Economic Research Council (PERC) concluded that only 0.5 percent found an error that would cause the consumer to move to a higher risk category and possibly pay a higher interest rate. Even the recently released Federal Trade Commission study – which used “coaches” to help consumers find errors — said that only 2.2 percent of reports had an error which potentially could have a meaningful impact on the consumer’s score.

Studies show that when there is an error and consumers use the dispute process, they are satisfied with the outcome 95 percent of the time. We resolve three out of four disputes within 14 days – less than half the time required by law. And we’re instituting a new process that will reduce the dispute processing time dramatically – in some instances by up to 50 percent.

Incorrect data makes its way into our database for many reasons. When a consumer disputes a report, the first thing we do is to ask whoever furnished the data in the first place to verify it. In 2012, data furnishers responded to our verification requests in 8.5 days on average. (Legally they have 30 days to respond.) To speed this up even more, we’re upgrading our processing system to let us transmit the disputed consumer document images to the data furnishers rather than the current method of forwarding the dispute request, which triggers a process with the data furnisher to look up the necessary documents.

Over the past year, about 60 percent of these reinvestigated disputes were closed when the data furnisher verified the information in question was accurate. In 40 percent of the cases, Equifax modified or deleted data in a consumer’s credit file. In 36 percent data was modified or deleted as a result of the reinvestigation. The remaining four percent of modifications or deletions were a result of the data furnishers failing to respond in the legally mandated response window.

Our goal is perfection – we want to ensure that every consumer’s credit file is accurate. For that to happen, all parties – data furnishers, consumers, government agencies and the CRAs – have a responsibility and need to work together.

20 comments

  1. frank engolia says:

    It is hard to file a complaint need to be stream line There is a lot of old files still on the report that need to be remove

  2. Robert Eissenberg says:

    how come my credit score is different with the
    three credit scoring agencies.
    Should the information provide the same score.
    are the scores based on different criteria
    whjch causes the numbers to be so different ?

    • Jessica says:

      Examine all 3 reports side by side. Something as simple as an inquire to one agency can change your score on that particular report. Make sure all three have exactly the same information.

    • EFX Moderator, EM says:

      Robert, great question. There are a few factors that could affect your credit score across the credit reporting agencies. Click here to read about some of the common reasons. I hope this helps.

  3. vipul says:

    When there is a disputes between service providers and consumers. The providers always have advantage when there is a disagreement. they are able to put a collection in the credit bureau lower the score of the consumer. Especially when looking at cell phones or cable or satellite services when what ever was promised is not delivered.

  4. Anonymous says:

    Funny…not even going to get a reply from these guys. That’s the problem.
    THEY DON’T CARE!

  5. jmc39 says:

    It’s unfortunate that getting cable services or cell phone service causes one’s score to go down. I relocated back to the US and setup cable and cell phone service. These credit inquiries made my credit score go down.

  6. Lender’s woes!! says:

    As a lender I am in a catch 22…Underwriting requires us to pull a new report if an item has been disputed to show that the dispute has been resolved. We do not know when the resolution will show up on the credit report so how many times do we pull the credit..or do we wait 30 to 60 days and cost the borrower money for the fees they have incurred on the loan to wait….then to start back over and risk the interest rate going up…what do we do????

    • EFX Moderator, EM says:

      It’s great to hear a lender’s perspective, thanks for stopping by. Your department should have policies in place about how to report to the credit reporting agencies. You can contact someone in your office about how best to handle the accounts. I hope this helps and thanks for posting.

  7. 1isalone says:

    What can the consumer do about missing information? One of my creditors does not furnish my credit limit to the bureaus (2 that I know of), this missing information was used to deny a credit limit increase with another creditor. I know I can ask the creditor to report it but if they don’t then what is a consumer to do about missing information that hurts their score.

  8. KH says:

    Transunion and Equifax are right on the ball when it comes to updating credit info; Equifax is EXTREMELY slow when it comes to correcting inaccuracies. I once disputed some information in my credit file. Even after the result was updated, it still said that “The consumer disputes this account information.”- which I no longer did. Since it said this (only on my Equifax “file”) I was denied a mortgage loan, and someone else bought the house that I wanted to buy. Equifax’s incompetence is to blame for my missing out on the deal of a life time. An institution so inept should not be in charge of judging people’s creditworthiness. I’d love if they were removed from the credit scoring equation, since thy are ENTIRELY ignorant and useless.

  9. Virginia says:

    Where did my mortgage account go?

    I periodically check my credit score and report across all three credit reporting agencies.

    After looking at a recent report, I noticed a statement that read:

    “There is insufficient information about mortgage accounts. You either have no mortgage accounts, or there is insufficient information about mortgage accounts, in your credit file. People without mortgage accounts or those who do not have sufficient information about mortgage accounts are considered riskier by lenders. It is important to have various types of credit that are held in good standing in your credit file, including mortgage accounts.”

    I took another look at the report, and sure enough, the mortgage account is no longer showing. On my January 2013, and on my September 2012, and on all credit reports since first taking on a mortgage in 2009, have all shown my mortgage account.

    So, sometime between January and April 2013, the mortgage account was removed from all three credit reporting agencies. But by whom?

    This is still an active, ongoing account and it concerns me that it is no longer visible. Even closed accounts stay on file for seven years.

    How does something like this happen?

    • EFX Moderator, EM says:

      Virginia, I’m sorry to hear about your troubles. Information on your credit report is collected by the lender and sent to the credit reporting agencies. It could be that your mortgage lender is reporting less information than they should to have it completely appear in your credit file. You could call them and let them know about this issue. If that doesn’t resolve it, you could also file a dispute. It’s often helpful to include additional information to support your claim, such as a credit report showing the mortgage information and a statement. Please let us know if you’re able to get this resolved. Thanks for posting.

  10. Marta says:

    what can I do if I disputed an incorrect information (online) and more than 30 days have passed. My dispute update still states “pending”?
    Thank you


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