Credit scores seek to summarize an individual’s financial behavior and distill that identity into the credit reports on relatively innocent Americans whose scores are marred by errors in reporting.
As an example, McCaskill cited the plight of Brenda F. Campbell, 56, of Nixa, Mo. – a city just south of Springfield – whose credit report was marred by mistaken links to credit problems of unrelated people with the same name. It took years and thousands of dollars in legal fees for Campbell and her husband to get the errors corrected.
“The ‘real’ Ms. Campbell tried to correct these obvious mistakes using the credit bureaus’ dispute processes, but was unsuccessful,” McCaskill told the subcommittee.
“She had trouble obtaining credit, received calls from collections agencies, and at one point received a notice of wage garnishment – all because the wrong Brenda Campbell’s information was in her file, and no one would help her. She ultimately had to hire a lawyer and sue to get this fixed – but it took, quite literally, years and tens of thousands of dollars to do it.”
Judy Thomas, an Ohio woman whose credit was somehow falsely linked to that of another woman with a different last name, told the panel that it took her years to straighten out the erroneous credit report. “I have fought to be Judy Thomas for the past 14 years,” she said.
While a representative of the credit reporting industry acknowledged some mistakes, he said the percentage of errors is relatively low – and the industry is working to make errors scarcer. “We want to get it right,” said Pratt.
Pratt told the panel that 95 percent to 98 percent of credit reports are accurate and about 95 percent of consumers report being satisfied with how their disputes with credit reporting firms are handled. Even so, he said the industry has set up a working group to find ways to improve what he called “the re-investigation process” in response to disputes filed by consumers.
But Ira Rheingold, executive director of the National Association of Consumer Advocates, complained about “an unreasonable credit report dispute process” as well as what he described as “systemic errors“ in the credit reporting system.
While Pratt defended the accuracy and satisfaction record of the credit reporting companies, Klobuchar pointed out that, even if only 5 percent consumers are not satisfied, that represents 10 million Americans.
And McCaskill grilled Pratt on the fact that millions of Americans are negatively impacted every year by mistakes in credit reports. “You have a big problem,” she said. “Consumers are needing a cop on the beat here still,” said McCaskill. “We’re going to stay with this.”