Money: A pattern of sloppy credit reports

Now will credit agencies finally figure out how to stop making egregious errors in people’s credit reports? asked Tara Siegel Bernard in The New York Times. Last week, a federal district court in Oregon awarded Julie Miller “a whopping $18.4 million in punitive damages,” after Miller sued Equifax for failing to remove “a host of errors” from her credit report. The credit bureau mixed up Miller’s credit history with that of another woman of the same name, and wouldn’t set things straight despite the 13 letters Miller sent over two years before finally filing suit. The agency’s “indifference should surprise no one who has ever tried to deal with any of the three big credit reporting agencies”—Equifax, TransUnion, and Experian. Experts say credit bureaus tolerate these errors—and the hefty settlements they pay to aggrieved consumers—as a cost of doing business. They’d rather err by putting inaccurate information in your report than miss a single possible credit failing. If you think Miller’s victory will teach them a lesson, “you are a lot more optimistic than close observers of the industry.”

Yet as Miller’s case showed, credit report errors can have serious consequences, said Kathy Kristof in CBSNews.com. They can affect consumers’ ability to get loans, secure other lines of credit, and get approved for jobs or apartments. Regulators say that more than one fifth of credit reports contain errors. If you suspect or spot an error on your own, start by getting a free copy from AnnualCreditReport.com. Then write to the agency, “simply noting the inaccuracies on a copy of the report,” and attach copies of any documents that might back up your claim. Send your correction request by certified mail and request a return receipt to prove that the agency received your letter. Bureaus are supposed to respond within 30 days. And if that doesn’t happen? Well, you might have to follow Miller’s example and sue.

We need tougher regulations to give consumers “the legal tools to force correction,” said the Tampa Bay Times in an editorial. Legislators should provide regulators with the muscle they need to hold credit bureaus accountable “by imposing higher standards for putting information into credit files in the first place.” They should require credit agencies to match Social Security numbers, which would reduce the “mixing of strangers’ data.” And they should clearly lay out what steps an agency must take to “reasonably” investigate a dispute. We don’t need more lawsuits, but rather stronger laws that will finally “give consumers power over their own information.”

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