In a column written at the end of July, financial writer Michelle Singletary shared some good news for consumers. She reported that on September 30, 2012, the Consumer Financial Protection Bureau (CFPB) will start supervising credit reporting agencies, popularly called credit bureaus, including the big three—Equifax, TransUnion, and Experian. Prior to September 30, there was no single federal government agency that could adequately see the entire picture of what was happening in these companies. Consumer advocates have complained for years that the information collected by credit reporting agencies includes errors which can affect consumers’ ability to get a credit card, home loan, apartment, and even a job.
The credit bureaus and any businesses supplying them with information must correct inaccurate information, however, getting erroneous information removed from credit files is easier said than done. According to Singletary, the problem with the system is the credit bureaus rely on information provided to them by companies trying to collect debts. Singletary had first hand experience with trying to dispute incorrect information in her credit report. It lowered her credit score by 100 points. It took her a few tries before the inaccurate information was removed.
The CFPB will supervise credit reporting agencies that have more than $7 million in annual receipts which translates into about 94 percent of the market. The big three credit bureaus issue more than 3 billion consumer reports a year and maintain files on more than 200 million Americans, the CFPB says.
CFPB Director Richard Cordray said, “Credit reporting is at the heart of our lending systems and enables many of us to get credit, afford a home, or get an education. Supervising this market will help ensure that it works properly for consumers, lenders, and the wider economy. There is much at stake in making sure it is both fair and effective.”
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