Actual Payment Information Suppressed
The biggest credit card companies are suppressing actual payment information on credit reports.
The CFPB reported in 2020 that the largest credit card companies are purposely suppressing customers’ actual payment amounts from their credit reports. Actual payments are the amounts the borrower repays each month, as opposed to the minimum payments or balance. This means that millions of borrowers are missing key information of their repayment behaviors that impacts their credit. This suppression harms the opportunity to receive better financial offers and costs billions of dollars in interest expenses.
As of 2022, the CFPB reported that Americans paid over $120 billion annually in interest and fees on credit cards and since then the average interest rates charged by credit card companies have been quickly increasing.
Last May, the CFPB sent letters to the CEOs of the nation’s largest credit card companies - JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express - asking if they furnished actual payment information. They asked why they stopped sending complete data and if they had plans to change their practice.
They learned that:
One large credit card company took the move first, and the others started suppressing their data shortly after.
The companies didn’t say when they intended to restart reporting actual repayment information.
Companies suppress data to limit competition. By withholding information it made it harder for competitors to offer more profitable and less riskier customers better rates, products, or services.
Credit card companies are making it difficult for people to shop for credit and to save money. People expect that their credit behaviors - like paying credit card bills in full each month will be reflected in their consumer reports and credit offer they receive.
More Information from the CFPB: CFPB Summary
Buy Now, Pay Later & Credit Score
Buy now pay later options do not generally affect peoples credit and do not yet routinely appear on most credit reports. The credit bureaus; TransUnion, Equifax, and Experian are each working through this relatively new system and how to report on these services in the context of credit worthiness and a borrowers financial obligations.
This means that a good record of payment on your buy now, pay later accounts will not help build your credit. It also won’t hurt your credit unless your account is sent to collections. This payment option is popular with younger generations, as they are least likely to have built their credit. For now, it is a good way to practice building your credit.
How Buy Now, Pay Later Works
When you purchase something online, some stores may offer to divide your purchase into smaller installment payments. Most often into four payments, every two weeks. The most used options are Affirm, Afterpay, Klarna, Paypal, and Zip. They partner with retailers who pay them commission.
Approval is partially based on data that includes address stability, public records and previous history you may have with the lender and banking information.
Opportunities for Credit Building
The credit bureaus are working hard to incorporate this method into their formulas. Consumers are using these accounts online more frequently than traditional credit cards and loans, especially young consumers. This could prove to be most beneficial to build up credit.
There are Risks
Since buy now, pay later loans are new and unregulated they are often paid late, most often by consumers of the age group 18-30. BNPY lack the typical protections you would have under a credit card such as dispute resolutions. The easy access to the application causes the consumer to impulsively purchase and buildup debt faster than they normally would. The consumer may also rack up multiple BNPL accounts on multiple sites that could potentially lead to collection accounts. Once sent to collections, it will end up on credit reports.
The Credit Bureaus
It has been decades since a new type of credit has been in the market. The BNPY system does not fit perfectly within the two categories they have in place now: Installment loans that span months or years and revolving credit like credit cards.
The bureaus are working together to find a format that fits and are figuring out a common ground.
Current Plans:
Experian has announced it plans a specialty bureau to hold buy now, pay later data. Information from the specialty bureau will be “promoted” periodically into the consumer’s core credit file.
Equifax plans to add the information to regular credit reports.
TransUnion has said it will partition off the data on core credit reports.
$88 Billion in Medical Bills on Credit Reports According to CFPB
Credit Bureaus Still Failing Consumers
Recently on November 10, 2021, U.S. Senators Senators Brian Schatz (D-HI), Sherrod Brown (D-OH), Ron Wyden (D-OR), Elizabeth Warren (D-MA), Jack Reed (D-RI), Chris Van Hollen (D-MD), and Ben Ray Luján (D-NM), urged the Consumer Financial Protection Bureau (CFPB), to take action to reform the credit reporting industry.
They want the consumer reporting agencies (CRAs) to improve the accuracy of credit reports, minimize the hassle, and hold the CRAs accountable for errors.
The smallest of errors could affect millions of people. This could prevent them from getting a job or housing at no fault of their own. These mistakes, consumers may pay more for credit and be denied loans, getting mortgage, or renting an apartment.
A study that took pace in 2012 found that one in five consumers had an error on their credit reports and five percent had errors that were economically damaging. A followup in 2015 found that nearly 70% of the impacted consumers surveyed three years earlier continued to dispute information.
If you need information on the disputing process or to seek legal action, contact us for help at anytime.
What is an ACDV?
The largest search we find on our page concerns ACDV’s. So, what is an ACDV?
An ACDV is an Automated Credit Dispute Verification form that is used by the credit reporting agencies to communicate consumer disputes to lenders and collection agencies.
ACDVs are transmitted to furnishers via an electronic system known as the "E-OSCAR" system, which is an automated system that enables furnishers and credit reporting agencies (CRA’s) to create and respond to consumer credit history disputes.
The ACDV process tracks and manages an ACDV initiated by a credit reporting agency on behalf of a consumer and routes it to the appropriate furnisher.
The furnisher then, returns the ACDV to the initiating CRA with the updated information (if any) relating to the consumer's credit history.
In responding to an ACDV, a furnisher informs the CRA’s if the disputed information is "Verified" or if the disputed information should be "Changed" or if the disputed item of information should be "Deleted". To do this the furnisher literally checks a box.
Once checked, this will instruct the CRA that all information about the disputed tradeline is, in fact, accurate and that no changes should be made. If a furnisher chooses to change information, it will check a box called "Change Data As Shown" and then will input changes into the various fields of information that need to be changed. Whenever a furnisher directs a CRA to change information on a consumer’s credit file, that furnisher affirms to the CRA that it has made the same changes to its own systems. This affirmation is made by the furnisher on the form used to process the dispute.
Problems persist with Credit Bureaus
Problems persist with Credit Bureaus
Have you experienced issues with credit bureau’s? It seems to be a running theme. The three major credit-reporting bureau’s – Equifax, Experian, and TransUnion, have had the most complaints for four consecutive years. These complaints involve inaccurate information on credit reports. Fighting with these bureaus can be a hassle because the bureaus have more power than the consumer.
Lawmakers have only begun to pay attention since the enormous data breach from Equifax just two years ago. This led to being able to freeze your reports for no fee but didn’t provide any new ways to protect the consumer. There have been a few reforms in the past few years, such as bureaus being required to inform the other bureaus when a credit file is found to be mixed with another person and that a report can no longer include debts outside of an agreement or contract. For example, The reports are not allowed to include medical records that are 180 days old or less or medical debts that have been paid by an insurer.
Problems have been persistent, and it seems that reform is not happening fast enough. The disputes are converted into codes that summarize the complaints for the data furnishers, which can be thought of as computers talking to computers. This can be frustrating when you have a dispute that is more complex and you need to talk to a real person.
During the data breach of 2017, Equifax had a settlement of $700 million, which is comparable to a parking ticket in their eyes. It is just the cost of doing business and easier than changing their business practices to be fair and partial to consumers. It is imperative as a consumer to check your credit report regularly, or you may find yourself unexpectedly rejected for credit when it is most crucial. annualcreditreport.com is a site where you can check your credit report for free annually. As a consumer, it is your job to identify that your accounts are in good standing and have all the correct information. If your personal information is wrong, it could potentially be a mixed file or identity theft. It isn’t uncommon for a credit file to be mixed with someone who has similarities to your identifying information. It is most likely to happen if you have a common first and last name or if you have a family member with a similar or the same name. Credit bureaus may even consider only 7 of the 9 digits of your social security number when matching your information. You have the right to dispute these errors and have them corrected and/or deleted. An error in your file could prevent you from getting credit, renting a home, or getting a job.
If you come across an error, you should take action from both sides. You should contact the furnisher that provided data to the bureaus and to contact the bureau(s) reporting the error. It may even be best to write a formal letter by mail so that a person and not a computer will receive the information. It also provides you with a paper trail if you were to make a claim. Being persistent is key, it is not easy to get a furnisher to immediately admit their wrongs. Filing a dispute with the credit bureaus as you communicate with the furnisher will help preserve your right to make a legal claim if the error fails to be corrected. You can find dispute information and mailing addresses through these links: equifax.com/disputes, experian.com/disputes and transunion.com/disputes Contact us today with any questions you may have regarding your credit report.
Credit Agencies To Ease Up On Medical Debt Reporting
NPR - Millions of Americans have medical debt that's hurting their credit. The Consumer Financial Protection Bureau estimated it's as many as 43 million people, according to data released in late 2014.
Now, some relief may be on the way.
Changes in the way credit agencies report and evaluate medical debt are in the works. They should reduce some of the painful financial consequences of having a health care problem.
Starting Sept. 15, the three major credit reporting agencies — Experian, Equifax and TransUnion — will set a 180-day waiting period before including medical debt on a consumer's credit report. The six-month period is intended to ensure there's enough time to resolve disputes with insurers and delays in payment.
Update: Credit Industry Reform
An update on the National Consumer Assistance Plan
On March 8, 2015, Equifax, Experian and TransUnion (CRAs) entered into a settlement agreement with the NY Attorney General along with 31 additional AGs from other states. Upon entering the agreement, the CRAs announced that they would address a number of credit reporting industry problems, including their dispute process and how they handle unpaid medical debt. This agreement is referred to as the National Consumer Assistance Plan.
The credit reporting industry overhaul is taking place nationally over the course of three plus years with 2018 as the deadline to have all changes made. The overhaul will be implemented in three phases (detailed below) to allow the CRAs to update their IT systems and procedures with data furnishers.
To date, changes to websites and other technical tasks have been acomplished. A change to be implemented this September will address the dispute process. The CRAs will be using trained and empowered employees to review the documentation accompanying disputes. And, if a furnisher says its information is correct, the credit reporting agencies must still look into it and resolve the dispute.
In addition, the credit reporting overhaul will require CRAs to wait 180 days before adding any medical debt
Defining the Credit File
Inside the database of a credit reporting agency...
To know what a credit file is you must first understand what a database is and how it functions. A database is structured data that is accessible in a variety of ways. There are about a dozen different kinds of databases, and the credit reporting agencies use one of the most common types, a relational database. At the most basic level, a relational database is an electronic database that arranges information into one or more tables with a unique identifier for each row. In a credit reporting agency's database, each row represents a single consumer while each column contains bits of information attributed to the column header (such as Social Security number or date of birth).
Credit Files & Credit Reports
The term "credit file" is often used interchangeably with "credit report", but in the credit reporting industry these terms are distinctly different. A credit file is a bit of raw data contained within a database. At any given time, the national consumer reporting agencies maintain hundreds of millions of consumer credit files in their databases. According to some estimates these files relate to approximately 250 million credit active consumers across the United States. This means that many consumers have more than one credit file in a consumer reporting agency's system.
A "credit report" is something that does not currently exist. A credit report is created at the moment that it is asked for. Your credit report might look different today than it will a month from now, and most certainly will look different than it did three months ago. ...
Who is allowed to pull your credit report?
Not just anyone can pull your credit report. The Fair Credit Reporting Act, the federal law which governs credit reporting, allows credit reporting agencies to generate your credit report under the following circumstance and no other:
- by written request from you or a guardian
- by court order
- by request from a state or local child support enforcement agency
- by request of others who intend to use your credit report:
- to extend credit (including landlords and utilities)
- to collect debt (debt collectors)
- for employment purposes
- for insurance underwriting purposes
- to determine eligibility for a license or government benefits
- to determine if you meet the terms of an account
- for business transactions
Are utility bills and rent payments on your credit report?
Utility bills and rent payments may be on your credit report. It depends on what type of consumer you are. Until recently, roughly 53 million consumers did not have access to the mainstream credit system because they had no credit. FICO's new scoring system uses rent, utility, cell phone, and cable payments to score consumers who previously had little to no credit, or no FICO score.
Credit Reporting Reform Underway
2015 is a big year for the credit reporting industry. Major changes are underway. Earlier this year, Equifax, Experian, and Trans Union announced that they would change the way they handle credit disputes and unpaid medical bills. Credit experts say the announcement marks the biggest reform for the credit reporting industry in more than a decade. Most importantly, these changes will help millions qualify for better interest rates on student, home, and auto loans.
Consumer Reporting Agencies
What is a Consumer Reporting Agency?
The term "consumer reporting agencies" is a statutory term defined by the Fair Credit Reporting Act (the "FCRA"). Consumer reporting agencies are often referred to as "credit bureaus" or "credit reporting agencies." Under the FCRA, a consumer reporting agency is a company that collects information and provide reports on consumers that are most often used to decide whether to provide consumers credit, insurance or employment. The following is a list of companies that identify themselves as consumer reporting agencies:
National Consumer Reporting Agencies
- Equifax
- Experian
- Trans Union
Limitations of the e-OSCAR System | Credit Report Disputes
In a study released this month by the Consumer Financial Protection Bureau, the CFPB found that there are specific limitations on the e-OSCAR system; the electronic system used by the national consumer reporting agencies (Trans Union, Experian and Equifax) (CRAs) to process consumer disputes of the accuracy of their credit reports. Under the Fair Credit Reporting Act, the CRAs are required to send data furnishers a notice of a consumer dispute that includes “all relevant information regarding the dispute that the agency has received from the consumer.”
You May Have More Than One Credit File
At any given time, the national consumer reporting agencies maintain hundreds of millions of consumer "credit files" in their databases. According to some estimates these files relate to approximately 250 million credit active consumers across the United States. This means that many consumers have more than one file in a consumer reporting agency's system. Having more than one file on any one consumer serves as a catalyst to incomplete and inaccurate data being relied upon in the creation of a consumer report (commonly known as a “credit report”).
Numerous credit files may exists on a single consumer for the following reasons:
- Consumer reporting agencies may not have enough information to say with the highest degree of certainty that each of the credit files should "merge."
- The various creditors' records do not always identify an individual consumer in the same way.
- Consumers may use two or more names in their credit activities (such as nick names, maiden and married names, names with and without generational suffixes).
- Consumers may have two or more addresses (such as home/school, work/home or vacation or second homes).
- Creditor's records may misspell or invert letters in names, street addresses, or social security numbers.
Consumer Reporting Agencies Subject to Increased Federal Supervision
Earlier this week, the Director of the Consumer Financial Protection Bureau (“CFPB”), Richard Cordray, spoke at a field hearing were he discussed the CFPB’s new authority to supervise consumer reporting agencies. Starting this September, the CFPB will have the authority to supervise 94% of the credit reporting industry. Until now, consumer reporting agencies (commonly referred to as “credit reporting agencies” or “credit bureaus”), the largest of which are Equifax (including credit files owned by CSC Credit Services), Experian, and Trans Union, have never been subject to like supervision. From conducting on-site examinations to seeking better comprehension of policies and procedures, the CFPB’s supervisory authority will seek to ensure that the consumer financial laws are being followed.
The creation of the consumer bureau, the CFPB, was done so in response to the recent financial crisis experienced by the United States.
Understanding How Credit Information Is Reported
In order to effectively protect your credit history, you must first understand how credit information is reported to the consumer reporting agencies. The consumer reporting agencies (Trans Union, Experian, Equifax and CSC Credit Services) receive credit related information and store that information in sophisticated databases. Those that provide credit information to the agencies are known as "furnishers." Furnishers are typically lenders (such as those that provide revolving credit lines, mortgages, student loans and the like) but may also include others like public information venders that collect and provide public record information (such as judgments and bankruptcies) to the consumer reporting agencies.
One common misconception is that when furnishers report your credit information that information posts directly to your "credit report" which in turn is provided to potential creditors when you apply for new credit. This misconception is wrong for many reasons all of which relate to how the agencies collect, sort and then disseminate credit information.
Possible Credit Files - You May Have More Than One Credit File
Consumer reporting agencies (commonly known as "credit reporting agencies" or "credit bureaus") provide consumer reports (commonly known as "credit reports") to subscribers who use the information to make credit granting decisions. In order to obtain a consumer report, the agencies require their subscribers (i.e. banks, department stores, insurance companies and others) to furnish the name and address for the person on whom they are inquiring. Some agencies, such as Trans Union, also encourage subscribers to provide a consumer's social security number as well. At any given time, the national consumer reporting agencies maintain hundreds of millions of "credit files" in their databases. A credit file contains indicative information (such as name, address, former address, social security number and other information) and individual trade lines (such as account number, credit terms, payment history and other items) belonging to the consumer. These files relate to the credit active consumers across the United States of which there are approximately 250 million, meaning that many consumers have more than one file in a consumer reporting agency's system.