Credit Bureaus Don’t Forward Documentation

Credit Bureaus Don't Forward Documentation

Technical presumption of guilt (Photo credit: Wikipedia)

Credit Bureaus Don’t Forward Documentation

When you disputed that error on your credit report you enclosed carefully detailed documentation supporting your claim.  Don’t assume that this documentation was then forwarded to the alleged creditor for examination.  It wasn’t according to the Consumer Financial Protection Bureau‘s latest report.  Instead it was simply assigned a code classification and that code was forwarded to the alleged debtor for review… by its code reader. The truth is Credit Bureaus don’t forward documentation!  The CFPB study says that documents customers sent to the big 3 Credit Bureaus were not being forwarded for review by the alleged creditor. Not only was it found that credit bureaus don’t forward documentation but they don’t even provide a mechanism for consumers to do it!  It is impossible to do a diligent review without these documents.  This means the same information that had already been submitted by the alleged creditor was just re-submitted back.  It then passed Credit Bureau review.

I’ve always suspected this.  This is the most comprehensive study of credit reporting we’ve had.  Its stated goal is to “bring more clarity to the confusing world of credit reports.”

The CFPB has directed the credit reporting agencies to change their policies on this.  We’ll see how that works out.

Yet More Disturbing Facts

This is not the only shocking find in the first comprehensive review of the ways and means by which the credit reporting companies go about their business. Credit bureaus impact the financial lives of the 200 million Americans they keep files on.  Here are the eye openers:

  • More than half of the trade lines reported are credit cards.
  • More than a third of the disputes involve collections.
  • Fewer than 1 person in 5 obtains their free credit report each year.
  • Most of the information the credit bureaus compile comes from a few large companies.
  • 85 percent of the complaints were passed on to furnishers, 15 percent were resolved internally.
  • Only 4 percent of consumers disputed one or more items.
  • Only 4 percent of complaints were deleted or modified because the reporting company did not respond.

Credit Bureau’s Bias is Clear

This study clearly demonstrates that the credit reporting system is biased towards the alleged creditor.  Clearly the information the alleged creditor furnishes to the reporting agencies is given more weight than the information the consumer furnishes.  In plain English there exists a presumption of guilt.

Unfortunately this report doesn’t tell us what percent of reports contain 1 or more inaccuracies.  Estimates on this figure are spun in outrageous ways to suit the agenda of the one quoting the percentage.  We need some science involved to get an accurate picture of that problem. Maybe the CFPB’s next study will look into this.

Do consumers get the same credit scores themselves that the lenders do?  In general they were highly correlated says the report.  However 1 in 5 consumers would likely receive a score that was materially different from that used by lenders.  There’s something wrong there that needs to be fixed immediately.

If a consumer files a complaint and is dissatisfied with the resolution they get from the offending credit bureau the CFPB is available to assist.  They strongly prefer that you try to resolve your complaint with the offending credit bureau before you ask for their assistance.  You can then furnish documentation to the CFPB of what you have done with the bureau that has failed to act.  This will streamline the process.  When credit bureau’s don’t forward documentation you can follow through and get the result you want.

I recently disputed an entry for a paid court judgment on a credit report by submitting a certified copy of a stipulation saying the matter was “dismissed with prejudice”.  This is proof beyond any doubt that there was no paid judgment.  Equifax still refused to delete.  A complaint to the CFPB resolved the dispute with a deletion.  Dealing with the Feds is something the credit reporting agencies will avoid whenever they can.  I was glad I had the paper trail to demonstrate my compliance with the CFPB’s directive to try the credit reporting agencies first.  Court judgments are now rarely reported due to verification difficulties.

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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