Why are credit reporting complaints on the rise?

In recent years, consumer complaints related to credit reporting, credit repair services, and other consumer reports have experienced a surge, capturing the attention of the Consumer Financial Protection Bureau (CFPB).

While complaints concerning other consumer services monitored by the CFPB, such as mortgage lending, debt collection, and more have remained relatively stable, the number of credit reporting complaints rose by 336% between 2019 and 2022.

These complaints indicate a growing dissatisfaction with the accuracy, security, and transparency of credit reporting businesses.

What are credit reporting and credit repair services?

Credit reporting refers to the process by which credit bureaus compile and maintain individuals’ credit histories, or the record of a borrower’s repayment of debts. Credit reporting services then use this information to assess an individual’s creditworthiness and determine credit scores, which have wide-reaching implications for someone’s financial future.

On the other hand, credit repair services aim to assist individuals in improving their credit standing. These services offer guidance on disputing inaccuracies in credit reports, removing negative items in an attempt to boost credit scores.

However, the CFPB receives a high number of “fraud or scamming” complaints against credit repair services, and it notes that some services use deceptive practices that, at times, end up in no significant credit score alterations.

Are credit reporting complaints on the rise?

The CFPB Consumer Complaints Database has tracked a rise in complaints filed against credit reporting agencies, credit repair services, and other consumer reports over the past several years.

In 2017, the first year for which consumer credit complaints data is available, about 8,100 complaints were made per month. This average increased 14% in 2018, and the trend has continued upward, reaching an average of 74,300 complaints per month through the first five months of 2023.

Most complaints are filed against the “Big Three” credit reporting services – Equifax, Experian, and TransUnion – which cover more than 1.6 billion credit accounts for over 200 million adults every month.

In 2022, these three companies received 542,673 complaints filed to the CFPB by consumers: 182,653 for Equifax, 175,431 for Experian, and 184,589 for TransUnion. In total, this represents about 90% of all consumer complaints received by the CFPB in 2022.

Despite slight month-to-month fluctuations, the trajectory remains consistent, illustrating a surge in consumer dissatisfaction with credit reporting and credit repair services.

Why are complaints against credit agencies increasing?

The fourfold increase in consumer complaints between 2019 and 2022 warrants an exploration of the underlying causes. Based on reports from the CFPB, along with recent developments within the “Big Three” credit reporting companies, several factors may be responsible for contributing to this trend:

• Equifax data breach: In September 2017, Equifax experienced a data breach, exposing the personal information of approximately 147 million individuals. This breach raised questions about the overall security of personal data within credit reporting agencies.
• Identify theft and fraud: Data released by the Federal Trade Commission shows that consumers reported losing nearly $8.8 billion in fraud in 2022, an increase of more than 30% from the year prior. This rise in identity theft and fraud may result in a higher level of complaints filed by consumers each year.
• Increased awareness and access: Consumers may be more aware of the potential avenues of reporting credit-related complaints, meaning that the recent increase is associated with the ease of access to online tools and credit monitoring services rather than an actual influx in reporting issues.

The CFPB has released annual reports detailing the deficiencies in credit-related agencies responsible for these consumer complaints. Some reports emphasize the lack of substantive responses to consumer complaints filed by the CFPB.

In 2022, the CFPB Director, Rohit Chopra, said that “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” finding “serious harms stemming from their faulty financial surveillance.”

While the 2023 CFPB annual report finds that these institutions have improved in certain areas, it still recognizes the ongoing consumer burden presented by Equifax, Experian, and TransUnion, along with updated recommendations.

For a fuller picture of wealth and savings in the US, see how your retirement savings compare to others. Get USAFacts data in your inbox by subscribing to our weekly newsletter.