In some ways, the
Unfortunately, our credit information still isn’t as accurate, easy to obtain or secure as it needs to be. These failures mean
ERRORS ABOUND IN CREDIT REPORTS
A 2012 study by the
Nine years later, accuracy is still an issue. Earlier this year, Consumer Rep orts recruited nearly 6,000 volunteers to check their reports. The results: 34% found at least one error or account they didn’t recognize. (Unlike the longer-term
There simply aren’t enough incentives for credit bureaus to get things right. Their primary customers are financial institutions that can profit if someone who’s creditworthy gets charged a higher rate because of a mistake, says independent journalist
“We say it all the time, but I feel like it’s never said enough: We are not their customers. Banks are their customers,” Sullivan says.
Because business interests dwarf consumers’ concerns, the government needs to step in. The
CREDIT BUREAUS PROFIT FROM CONSUMER CONFUSION
Search for “free credit report,” “annual credit report” or even “AnnualCreditReport.com.” The first results are likely to be ads for other sites that shill credit monitoring. The real site is often halfway down the page, with no indication that it’s the official, federally mandated place to get free credit reports.
People are understandably confused when they click on the other links and are asked for a credit card — often after they’ve input sensitive information, including their
The real site should be the first search result for keywords related to free credit reports. Also, any company buying ads for these keywords should be required to have a prominent button saying something like, “Looking for AnnualCreditReport.com? Click here” with a link to the correct site. The search engines, credit bureaus and other companies selling credit monitoring are unlikely to do this on their own, so lawmakers need to act.
While we’re at it, let’s ditch the idea that access to our credit reports should be only once a year, or whatever cadence the bureaus decree. It’s our data, typically collected without our permission and with no way to opt out. If the credit bureaus won’t expand our access,
IDENTITY ‘VERIFICATION’ SYSTEMS BLOCK THE WRONG PEOPLE
More than one out of 10 people in the Consumer Reports study said it was “difficult” or “very difficult” to get their credit reports, often because they couldn’t answer the bureaus’ identity verification questions.
You know who doesn’t have trouble with those questions? Identity thieves. They use information culled from database breaches, such as the massive one at Equifax that exposed sensitive financial data of most adult Americans, to access people’s credit reports with relative ease.
“You don’t remember who holds your mortgage because it’s been sold five times. But a criminal has got all the information right in front of them,” Sullivan says.
Sullivan has some sympathy for the credit bureaus. Finding the right balance between security and convenience can be tough.
One solution is to make the information in credit reports, primarily
Another, more dramatic but perhaps necessary reform suggested by Consumer Reports: Credit reports should be frozen by default, which means consumers would have to consent before their information could be shared.
You don’t have to wait for government reform, of course. You can freeze your credit reports for free right now. “A credit freeze can put the control of the credit report in the consumer’s hands,” Ejaz says.
This column was provided to The Associated Press by the personal finance website