Mistakes and other problems on credit reports can put a consumer's financial future at risk.

Credit reports often play a major role in an individual’s financial life. These reports are created and housed — automatically and without permission — by the big three credit bureaus: Equifax, Experian and TransUnion.

Credit bureaus act as the defacto gatekeepers to much of the financial marketplace. But too often, they fail to act in the best interest of consumers.

If a credit bureau makes a mistake or includes irrelevant information on a credit report, it’s the consumer that pays the price. Credit reporting problems can keep people from getting mortgages, good interest rates or even a job.

That’s why PIRG is working to give consumers the tools they need to protect their credit, and is advocating for greater accountability on the part of credit bureaus.

Problems with credit bureaus abound

According to the Consumer Financial Protection Bureau's (CFPB) consumer complaint database, the biggest problems faced by consumers include mistakes on their credit reports and failure by the credit bureaus to fix those errors. The CFPB’s own examinations of the credit bureaus have uncovered inadequate handling of disputes, including failure to review all information submitted by consumers to dispute errors. The CFPB also found that credit reports often include data from unreliable data furnishers.

Credit reports are supposed to give creditors an accurate sense of whether or not a consumer is a risk for defaulting on future payments. But too often, they include information that doesn’t predict credit default, or is due to a situation which is no longer relevant — or is downright incorrect. Adverse information can often be the result of situations outside of a consumer’s control, such as a job loss, illness, divorce, death of a spouse, or broader economic crisis. Most consumers with damaged credit don’t engage in negative behavior again — yet they’re at risk of falling into a vicious cycle of not being able to recover financially. That’s because adverse information typically stays on reports for up to seven years (10 years for bankruptcies), resulting in a lower credit score that impacts a consumer’s long-term financial future.

Credit reports are also used in unfair ways. For example, credit scores, which have no bearing on one’s ability to do a job, can be used by employers in the interview process and hurt qualified applicants. It’s also unclear how accurate credit scoring models that use information from credit reports are in predicting the credit risk of consumers.

Credit bureaus collect, store and share our data. It's time we make them accountable to us, not the companies which pay them to access our credit information.

The CREDIT Act would be a gold standard

The Comprehensive CREDIT Act is the gold standard for reforms needed to fix the credit bureaus. It will:

  • Make it easier for consumers to find and fix mistakes on their credit reports.
  • Restore unfairly impaired credit, including reducing the time negative information stays on credit reports, limiting the reporting of medical debt, and giving struggling private student loan borrowers a chance to rehabilitate their credit.
  • Prohibit the use of credit checks for employment purposes. (There are exceptions for national security or other checks required by law.)
  • Direct the CFPB to regulate the accuracy and predictive value of credit scoring models.
  • Provide consumers with free credit scores used by lenders along with their free annual credit reports.
Our staff have worked with consumer champions such as U.S. Sen. Elizabeth Warren, former CFPB director Richard Cordray, and U.S. Rep. Carolyn Maloney to stand up to special interest in the financial marketplace and level the playing field for consumers.
Together we can protect consumer credit from unfair credit reporting practices

We can’t expect the credit bureaus to reform themselves, especially since we are not actually their customers.

The Comprehensive CREDIT Act passed the House in January 2020. It was reintroduced in the House Committee on Financial Services in June 2021. We are working on getting it brought back up for a vote in the House, while also working toward the 60 votes that will be needed in the Senate to get it passed.

That starts with getting more representatives to co-sponsor the House bill to help bring it up for a vote, first in committee and then for a full vote on the House floor.

We will also need to grow bipartisan support for it in the Senate Committee on Banking, Housing, and Urban Affairs in order to get it introduced in and passed by the committee.

We have successfully galvanized the public over the course of decades of advocacy under the leadership of Ed Mierzwinski, senior director of U.S. PIRG’s federal consumer program. We helped pass credit reporting reforms in 1996 and 2003.

We cofounded Americans for Financial Reform, the coalition that helped get the CFPB created by Congress in the wake of the 2008 economic crash. State PIRGs have helped pass legislation restricting the use of credit reports in employment purposes. Before the federal government took the states’ lead in 2018 by making credit freezes free for everyone, several state PIRGs worked to pass laws making credit freezes free in the wake of the Equifax data breach. We’re poised to usher in the next wave of reforms.

Freeze access to your credit report now

Follow our step-by-step guide for protecting your credit and freezing out identity thieves.