After the shock of losing her job, Lisa Hill-Green of Richmond, Va., struggled to pay her bills. In an effort to bring down her costs, she went to her mortgage lender for a loan modification. But then she faced a second shock: The bank denied the request, according to a lawsuit she later filed, saying her Experian credit report showed that her home was being used not as a primary residence but as a commercial mailing and marketing business. The problem: It wasn’t true.
Hill-Green filed a dispute with Experian to get the inaccurate information removed from her credit report. But according to the lawsuit, which was a class action on behalf of herself and the approximately 10 million other consumers affected by the same problem, Experian refused to fully investigate why the incorrect information was on her report to begin with, and then failed to remove it. This was the case even after Hill-Green demonstrated that the business had been operated by someone else at her address before she purchased the home and was legally no longer in operation.
In this article
- Why So Many Disputes?
- Check Your Credit Report
- How to Fix Errors
- If Your Dispute Is Denied
The company settled for a reported $22.5 million in 2023. As part of the settlement, Experian denied any wrongdoing, and said it was one of the largest class action settlements for credit reporting errors it had ever paid.
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Applying for a Mortgage? 5 Hacks to Improve Your Credit Score.
What to Do if You Are Denied a Mortgage
More Than a Third of Volunteers in a CR Study Found Errors in Their Credit Reports
Hill-Green is one of hundreds of thousands of consumers each year who struggle to get errors removed from their credit reports. In fact, for the past three years, having incorrect information on a report has been the No.1 complaint made to the Consumer Financial Protection Bureau, according to CFPB data compiled by Consumer Reports. What’s more, the number of complaints about credit report errors more than doubled in recent years, from 165,129 in 2021 to 443,321 in 2023, according to CR’s figures.
“Credit reports are a person’s financial lifeline,” says Ryan Reynolds, financial policy analyst for Consumer Reports, who conducted the analysis. “Having incorrect information on a report, whether it’s other people’s information, lines of credit listed in duplicate, or paid-off debt appearing as unpaid, can stop a person from getting needed credit or a loan, renting an apartment, getting affordable insurance, or even landing a job.”
Because credit reports have a growing importance in a person’s financial life, people may be checking their credit reports more often, says Chi Chi Wu, staff attorney at the National Consumer Law Center (NCLC), who specializes in credit reporting. “The stakes are a lot higher, and when that happens, people are going to be more cognizant, check their credit reports, and file complaints.”
Why Are There So Many Disputes?
Increasingly, the big three credit bureaus—Equifax, Experian, and TransUnion—use an automated decision-making process (in lieu of human employees) to screen initial consumer disputes to determine whether they meet their criteria for further investigation, according to a 2023 report by the CFPB on credit report errors.
The problem is that automated systems may mistakenly dismiss disputes made to the credit bureaus that should in fact be investigated. According to consumer complaints made to the CFPB that were highlighted in their report, some people received automated denials of their disputes withinhours.
This likely partly explains the rising number of complaints, CR’s Reynolds says, because a consumer is more likely to file a grievance after having problems getting errors fixed.
The industry blames another factor: social media influencers and credit repair companies that tell consumers to file CFPB complaints if there is a negative item on their credit report, whether it’s in error or not, says Sheila Greenwood, spokesperson for the Consumer Data Industry Association, which represents the three big credit bureaus.
In any event, the biggest problem is that the responsibility for ensuring the accuracy of reports falls on individual consumers, says Anjali Sakaria, chief advocacy officer at WorkMoney, a nonprofit that helps consumers with their finances. “What I don’t see happening are the credit bureaus taking responsibility to make sure that their reports are free from errors.”
Why It’s Important to Check Your Credit Report
About 13 percent of consumers have errors that affect their credit scores, the number that’s created using the information found in the report, says the NCLC’s Wu. But 5 percent have errors serious enough to cause a credit denial or raise interest rates. “That sounds like a very small number, but it equals about 10 million people.”
One way to keep that kind of mistake from causing problems for you is to check your report every few months so you can catch it early, Wu says. The good news: The three credit bureaus announced last year that they’ll provide free weekly credit reports via AnnualCreditReport.com.
CR has partnered with WorkMoney to launch Credit Checkup, a project designed to encourage consumers to check their reports and to provide guidance on what to do if they find mistakes. To help gather data on credit report errors, download your report, review it for errors, and tell us about your experience, Reynolds says.
If you find errors, also take steps to get them fixed and let us know how the credit bureaus responded. Data gathered from Credit Checkup participants will be analyzed for a report that will be shared with lawmakers and industry to inform their understanding of consumers’ experiences—and frustrations—Reynolds says.
Also, take the time to “freeze” your credit, a spokesperson from the CFBP told CR. It can prevent new fraudulent accounts from being opened in your name. Do this by going to each of the three credit bureau websites, logging in to your account, and setting it to “freeze.”(Note that you’ll need to unfreeze your account if you wish to apply for a loan or credit.)
How to Fix Credit Report Errors
The Fair Credit Reporting Act gives consumers the right to review their credit report and dispute incorrect information—and even to sue credit bureaus if they refuse to remove a mistake. Once a dispute has been filed, by law, credit bureaus must respond with a decision within 30 days. Here’s how to handle the process.
File a dispute with each of the three credit bureaus. That’s because Experian, Equifax, and TransUnion don’t communicate with one another. Filing a dispute with each credit bureau, instead of the lender or bank, offers protections governing how quickly it must be handled. It also provides a legal pathway to sue the credit bureaus and creditors or collectors, if necessary.
Include all evidence. Consider adding account statements or payment records, for example, to a dispute for debt that’s reported incorrectly. Credit bureaus can dismiss as “frivolous” claims that don’t have enough backup information. And if you try to resubmit the dispute a second time with the added information, it may be automatically denied if it’s considered too similar to a previous one.
Create a paper trail. Write a letter explaining the problem. Need some help? The Federal Trade Commission provides a free example letter. Avoid using standardized online forms provided by the credit bureaus’ websites, which might oversimplify your dispute by requiring you to choose among predetermined check boxes. Plus, by submitting your dispute online, you could unwittingly waive your right to sue as an individual or in a class action.
Send all materials by certified mail. Keep copies for yourself. This makes it easier to confirm that the credit bureaus follow the lawful timelines. Credit bureaus have five days to get the disputed information to the financial institution or debt collector that supplied the information. If that company doesn’t investigate and respond to the dispute in time, the credit bureaus are legally required to delete the information. And you should learn the result within 30 days of filing.
If Your Dispute Is Denied
File a complaint with the CFPB. Fill out the CFPB form and explain your situation, and attach all correspondence and financial documentation you have to support your dispute. The CFPB says they get most companies to respond by about 15 days, although they have 30 days.
Consider working with an experienced attorney. You have the right, by law, to sue a credit bureau or financial institution over credit report errors, Sakaria says. Find an attorney through the National Association of Consumer Advocates.
Add a note to your credit report file. Although it won’t change any incorrect information still found in your report, or improve your credit score, doing so can provide some additional context for anyone who views your file, says Bruce McClary, spokesman for the National Foundation for Credit Counseling. Some lenders may read those comments and realize you’re attempting to correct the errors, which could improve how the potential lender, employer, or landlord views your financial situation.
Lisa L. Gill
Lisa L. Gill is an award-winning investigative reporter. She has been at Consumer Reports since 2008, covering health and food safety—heavy metals in the food supply and foodborne illness—plus healthcare and prescription drug costs, medical debt, and credit scores. Lisa also testified before Congress and the Food and Drug Administration about her work on drug costs and drug safety. She lives in a DIY tiny home, where she gardens during the day and stargazes the Milky Way at night.
