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December 14, 2012

CFPB Report Details Consumer Data Management by Credit Bureaus



The Consumer Financial Protection Bureau recently unveiled a report detailing the customer experience with the three major credit reporting organizations of the country, namely Equifax Information Services, LLC; Experian Information Solutions Inc.; and TransUnion LLC. For the report, CFPB had undertaken an exhaustive study of the credit reporting up till now. According to the study, the consumer reports mainly comprise of credit card history. In terms of maximum disagreements, the list of debt collection components is at the top.  

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In a statement, Richard Cordray, director of CFBP said, “Today’s study is another step toward bringing more clarity to the confusing world of credit reports. It will help educate regulators and consumers about how this important industry works. If consumers know how these companies handle their credit histories, they can make better decisions on how to handle their financial lives.”

Businesses monitor a customer’s credit history with the assistance of credit reporting organizations or credit bureaus. These credit reports, which are produced by the credit rating organizations, along with the three-digit credit scores are very crucial to American customers. This information is normally used by organizations while making decisions related to offering credits and fixed interest rates for loans.

Currently, a minimum of 200 million files on customers are available with Equifax, Experian, and TransUnion. On an average, these organizations obtain updates related to customer information from nearly 10,000 data providers each month.

The report titled, “Key Dimensions and Processes in the U.S. Credit Reporting System: A review of how the nation’s largest credit bureaus manage consumer data”, analyzes nationwide information starting 2011. According to the report, at least half of the trade lines in the credit bureau databases are provided by the credit card industry. At least 66 percent of the disagreements are related to debt collections. Less than 20 percent of the people acquire copies of their credit report on a yearly basis. According to the report, only a small number of large enterprises are included in the information available in the credit files.

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Edited by Brooke Neuman
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