The CFPB has been pursuing the issue of credit reporting complaints for some time now, and with their latest report, there appears to be progress. According to the release, CFPB found that the three top credit bureaus:
Three Areas of Credit Bureau Progress in 2022
- Changed how they respond to complaints: Equifax, Experian, and TransUnion use of problematic response types described in last year’s report has declined. Most complaints now receive more substantive responses.
- Provided more tailored complaint responses: Across all three companies, most responses now describe the outcomes of consumers’ complaints. In September 2022, the nationwide companies provided a tailored response to more than 50% of complaints that were closed with an explanation or relief.
- Reported greater rates of relief in response to complaints: In 2022, TransUnion reported providing relief in most complaints. Experian reported providing relief in nearly half of complaints. Equifax reported that it did not provide relief, but its written complaint responses suggest that its rates of relief are comparable to the other two companies.
It’s Refreshing to See Progress with Credit Bureaus
There is even a commendation in the CFPB’s press release:
The CFPB expects the three nationwide consumer reporting companies to continue improving how they serve consumers. To that end, the CFPB recommends that Equifax, Experian, and TransUnion:
- Consider consumer burden when implementing automated processes: When companies consider introducing automated processes that will affect their customers, particularly those that relate to a legal right, they should consider consumer burden, especially whether a change will require consumers to do more work to exercise their legal rights.
- Recognize that technology is also improving for consumers: Advances in communications technologies mean consumers do not necessarily need to write complaints on their own. Instead, communications technologies may ease the writing burden. Such innovations, including ones that can generate letters for consumers, may create similar-sounding complaints that are, in fact, from unique individuals with independent concerns. The assumption that similar-sounding letters are from third parties will increasingly be wrong.
- Consider how to transition the market from control and surveillance to consumer participation: One potential reason there are so many reported inaccuracies in consumer reporting data is that consumers are several degrees removed from their own data. Enabling increased consumer participation on the data side of consumer reporting has the potential to create a fairer market with added benefits for consumers, consumer reporting companies, and lenders.
The full report is accessible here. But, before you read the 54 page document, take it from me- check out your own annual report, which you are entitled to receive without cost. It is free, easy to do, and just a good part of your credit hygiene.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group.