CFPB Examines Consumer Experience with Major Credit Reporting Agencies

The regulatory body looked at the three largest nationwide credit reporting companies: Equifax Information Services, LLC; Experian Information Solutions Inc.; and TransUnion LLC.

A new report from the Consumer Financial Protection Bureau shows that credit card history dominates the information in credit reports and that debt collection items generate the highest rate of disputes.

The CFPB released its report on the consumer experience with the three largest nationwide credit reporting companies: Equifax Information Services, LLC; Experian Information Solutions Inc.; and TransUnion LLC.

[See Also: Q&A With the CFPB's CIO]

Equifax, Experian, and TransUnion each have more than 200 million files on consumers, and in a typical month, they receive updates from approximately 10,000 information “furnishers,” which are the entities that supply data on consumers, the CFPB said. The furnishers do this on more than 1.3 billion “trade lines,” which are individual information sources on a consumer report such as a consumer’s accounts for a car loan, mortgage loan, or credit card.

“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,” said CFPB Director Richard Cordray in a statement. "If consumers know how these companies handle their credit histories, they can make better decisions on how to handle their financial lives."

Among the findings of the report are:

More than half of the trade lines in the credit bureau databases are supplied by the credit card industry
More than a third of disputes have to do with collections
Fewer than one in five people obtain copies of their credit report each year

The CFPB also found that most information contained in credit reports comes from a few large companies. The top 10 data furnishers provide 57 percent of the trade lines coming into the credit reporting companies, while the top 50 furnishers provide 72 percent, and the top 100 furnishers provide 76 percent, the report found.

The federal agency also said that the credit reporting companies resolve an average of 15 percent of consumer's disputed items internally, without getting the data furnishers involved, while the remaining 85 percent are passed on to the furnishers.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio