40 Million Mistakes: Is your credit report accurate?

If you challenge a credit report and mail your information to a post office box in the United States, the dispute will likely be investigated in India, or the Philippines or South America. We traveled 5,000 miles to the Chilean capital of Santiago where we tracked down three former Experian employees.

Carolina Herrera, Rodolfo Carrasco and Enzo Valdivia were all dispute agents at Experian's national consumer assistance center although they say they weren't able offer consumers much assistance.

Steve Kroft: So, if somebody had a problem with their credit report, they would send the complaint, and it would end up with you?

Many voices: Yeah. Oh, yeah.

Steve Kroft: So how many of these did you have to do a day?

Rodolfo Carrasco: Ninety.

Steve Kroft: Ninety?

Carolina Herrera: Ninety, yeah.

Steve Kroft: Did you consider yourself investigators?

Many voices: No.

Steve Kroft: Did you have any way to investigate these claims?

Carolina Herrera: No, we didn't. You can't call the person.

Steve Kroft: You can't pick up the phone and call them?

Many voices: No.

Steve Kroft: Did you have phones?

Many voices: No. No.

Steve Kroft: Could you email them?

Many voices: No.

Steve Kroft: Did you have the authority to say, "Wait a minute," after looking at somebody's file, and say that, you know, "This is a-- somebody made a mistake; this person doesn't owe this money"?

Rodolfo Carrasco: We didn't have that power.

All they did was read the disputes and reduce them to a two-digit code like "never late" or "not mine." It was then sent with a two or three-line summary and no documentation back to the bank or department store that furnished the original information.

Steve Kroft: If there was a difference of opinion between the creditor and the person who was filing the complaint, how was it usually resolved in the-- in favor of the creditor?

Enzo Valdivia: Yeah. The creditor was always right.

Rodolfo Carrasco: Mostly, we took for granted the word of the bank. If the bank said, "Hey, this guy owes $100," so it is.

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[bobrichards2]

The typical advice to contact creditor bureaus does not work for millions and that is the problem. The credit bureaus simply report what the creditors tell them to report. When a consumer complains, the bureaus simply confirm the same incorrect information with the creditors. And millions of consumers get stuck at this point, having no leverage to get the creditors to fix errors. 60 Minutes showed how their reporter, Steve Croft, got nowhere using the typical, ineffective advice to write the credit bureaus. Here is a solution that works and how I got AMEX and Citicorp to change their errors after they refused. The leverage is with the creditors and using small claims court gets their attention every time and is very inexpensive:
http://disputeyourcreditreport.us/ebook

[rgjohn]

Auto and home insurance companies are also taking advantage of credit report data - and not just the mistakes. With no federal or state regulation, they are abusing good credit histories to their own advantage - overcharging for premiums on new and existing policyholders. To justify rate hikes, Allstate in particular uses an elaborate point scoring scheme that distorts good credit history. They are using a "proprietary algorithm" programmed by their own analysts, based on their own rules on credit data should be assessed.
We've found that Allstate constantly changes their scoring criteria to their advantage. During July-Dec 13 policy periods, Allstate began assigning penalty points based on the total number of credit accounts an individual had within the past 5 years, even if the accounts were never used, no delinquencies, and are now closed or 0 balance. Allstate's "tier system" is weighted to trap policyholders in medium-high risk categories, and then raise premiums accordingly. Allstate has made it extremely difficult for older policyholders with families to meet their "low risk' categories and avoid hefty premium increases - even if they enjoy superior credit scores, clean driving records, accident free, and have never filed an insurance claim. Even with high credit scores (over 800) and no delinquencies, our home and auto insurance premiums increased by over $100.00 per month because of Allstate's scoring methods.
We've found other abuses with Allstate scoring systems. Allstate officially claimed to take adverse action only for credit data with delinquencies OVER 30 days late. In practice, they assigned a maximum penalty for any delinquency, even a single delinquency 30 days late or less. Allstate is also counting joint accounts twice for married couples on the same policy, and assigning penalty points for "Age of oldest account in years". In addition to the 5-year criteria, this is a latent form of age discrimination. All of this impacts older policyholders with large families or with college-age children. It literally extorts income using consumer's credit accounts, even if in good standing -- under the pretense of "credit risk".
Remember, insurance premiums are not loans, and insurance is a legal requirement in almost every state, it is not "optional". If insurance companies are allowed to impose their own rules in using credit data to set premiums, what is to stop other entities from charging different rates to people based on credit history "risk" -- including utilities, phone, cable, and health insurers ?

[c0neX0]

I WORKED FOR EXPERIAN FOR 5 YEARS. THERE ARE SOME KEY WORDS THAT TRIGGER CERTAIN PROCEDURES. IN JUDY THOMAS' CASE, WE COULD'VE HELPED HER WITHOUT VERIFYING ANYTHING WITH ANYBODY. I WAS ABLE TO DELETE WRONG INFO -ACCTS, TAX LIENS, BKPTS, CIVIL ACTIONS, CHILD SUPPORTS, STUDENT LOANS INCLUDED- USING SOLID PROOF DOCS. JUST SAY "MIXED WITH" "FRAUD" "ID THEFT" "YEARLY FREE REPORT" AND YOU'LL GET WHAT YOU NEED. MR DEWINE KNOWS SQUAT. WE ARE INDEED LIMITED BY THE COMPUTER PROGRAM WE USE, BUT WE DO VERIFY INFO AND CHENGE IT IF IT'S NECESARY, BUT THE REST IS THE CREDITOR'S RESPONSIBILITY. YOU SHOULD PROHIBIT CREDIT CLINICS, THEY BOMB THE CRA'S AND PREVENT US FROM DOING OUR JOB CORRECTLY, THERE YOU HAVE A FRAUDULENT BUSSINES GOING ON RIGHT IN YOUR NOSES.

[nickjones15]

cOneXO
How does one get in touch with you or "We"? In other words how does the consumer get to your department? What is it's name?

[c0neX0]

send a letter to: Experian, 701 Experian Parkway, PO Box 2002 Allen, TX 75013 to NCAC (National Consumer Assistance Center).
send proof of ID, ssn, and address and your disputes. keep it simple, but clear enought. by law, they are obliged to address your dispute in under 5 days from the receipt of your letter, and you MUST receive an answer 30-35 days from that same day. If you beleive you were victim of fraud, state it clearly, of if you think your file's been mixed up with somebody else's, do the same. sent proofs to back up your dispute in case you have them.all americans are entitled to one free credit report by law. send a letter with your personal info and request your "yearly free report" get one for free claiming to eb victim of fraud, or that you are unemployed or you receive social security you are entitled to that by the FCRA (Free Credit Reporting Act). I hope this helps.

[c0neX0]

nickjones15, i wrote you an answer, but it was not posted.

[rayman411]

My situation is a little more difficult to address. I was reported for student loans . AES holds four loans and bc I was past due I had four accts 60 days past due reported on my Acct. My perfect score plummented to a below average score.

I had no clue that the accts were past due. I only found out bc I signed up for a service with Transunion. WHen I saw the past due I made an immediate payment and called them right away but it was too late , Experian reported it a day earlier.
After I investigated the matter, It turns out my deferement ended and AES sent out new statements but I never received anything in the mail . I contacted my USPS office because three months earlier, I had to officially make a change of street address. Here it turns out my mail and packages were being left at an old address despite the fact I made a change of address with them months in advance and it was confirmed by them. Also AES had the correct new address. USPS sent me a letter apologizing for the lost mail during these specific two months. The problem is, during these two months my accout was running past due. AES did state they made calls but they don't leave messages. I went through my records during the specific time period and saw three calls in three month time period. As you can see the situation is a difficult one to address. I mean unfortunatley for me all these events lined up perfectly to screw me. How do you fight this error. I have to live with 4 negs on my credit for seven years because of a total amount of 54 dollars due. To make things worst the AES acct should have been in Unemployment derferment for another three months like the other two loans that I have with Sallie mae and Great lakes. A comedy of errors. If you have any advice on how to go about addressing my issue, I would greatly appreciate it. Have you had any instances where an error was made that wasnt identity fraud or mixed identification. Thanks for commenting! I wish this system was more friendly to the individuals who have to live and die by a credit score.

[jbruzina]

I thoroughly enjoyed your piece on credit bureau and credit scoring. It has been a long time coming. I work as a manager for a creditor and while I think there is so much value to the financial industry to credit scores and indications of risk, I also believe that financial institutions have taken advantage of the consumers and knowingly affecting their scores in other ways other than erroneous reporting. How about the affects of reducing their credit limits so that their score is adversely affected because of balance to availability? Regardless, I appreciate 60 minutes doing this report as consumers need to be made aware of the importance of their credit history and the more importantly - the accuracy of it. On the other hand, I do want to point out that there are many "credit fixer" companies out there playing games with the credit bureau and creditors. They know that the "rules" say that if there is a dispute that the creditor must respond within 60 days to the dispute or it is suppose to be removed from the debtors credit file. Now, while your report points out that basically nothing is being done by the credit bureaus to remove those items after 60 days, (or fix them for that matter), I have seen these credit companies keep sending notices over and over again as disputes (on the same accounts) hoping they will fall through the cracks one of the times. We are diligent is responding to disputes but unfortunately, our experience thus far with disputes are those who are trying to clean up their credit file when the data speaks for itself. There's always someone to take advantage. But, again, I applaud the story and as a creditor am equally as thankful as a debtor that this is finally getting attention and hopefully some resolution of fairness for all!

[creditmess]

Wow! Great report. Finally, the credit reporting secret is uncovered on a national level. 1 in 5 credit reports have a mistake, 1 in 10 credit reports have a big mistake!

I wish the 60 Minutes report would have provided some real solutions. Sadly, it didn't.

I found a do it yourself (DIY) solution on AttorneyXX.com after searching around the internet. There is a very good e-book which discusses how to force your creditors to fix your credit, fight the credit reporting agencies, do it fast, and even get a money judgment against your creditors. The e-book is called "How to Sue Your Creditors in Small Claims Court for Violating the FCRA. http://attorneyxx.com/wp/fcra-ebook/

For those of you who do not know, the FCRA is the "Fair Credit Reporting Act."

The fact that the credit agencies produce two reports, one for the bank and a different one for the consumer is appalling. This book tells you how to legally and quickly get the bank's version of your credit report. I wish 60 Minutes would have talked about this type of solution. But I thank 60 Minutes for sharing this very frustrating problem experienced by many Americans.

[Fullerg]

Re:40 Million Mistakes: Is your credit report accurate?

The problems with these credit companies goes beyond what CBS reported

First,the "40 Million Mistakes" don't just impact the individual - collectively these errors withdraw untold millions if not billions of dollars from our consumer driven economy.

Second, another negative for our overall economy due to Experian, TransUnion and Equifax, is these credit companies market their credit scoring as an employee evaluation tool to American companies , and many companies use them as such.

The marketing of credit scores as a hiring tool constitutes a misrepresentation of their value as a hiring tool - and that disproportionally impacts the poor,unemployed ,during a tough economy. And as the 60 Minutes report correctly stated, those with substantial errors on their reports are impacted .

Credit companies have admitted that researchers say there is no evidence showing that people with weak credit are more likely to be bad employees or to steal from their bosses. See New York Times: "As a Hiring Filter, Credit Checks Draw Questions"

http://www.nytimes.com/2010/04/10/business/10credit.html?pagewanted=all

[josephp5]

The illegal part is that the credit reporting agencies maintain separate files for banking customers and individuals. When you are denied credit they are supposed to send you a copy of your credit report. But they don't send you the same thing as what the loan company gets. That's a violation of the Fair Credit Reporting Act.

Ohio AG Mike DeWine will hopefully bring a prosecution against these law breakers---that's the only way that they will ever change. But the real force must come from the Federal level. But given our President's extreme deference to banker types, I don't anticipate anything being done anytime soon.

[pleasebbetter]

Thank you for this story. The trade group for the nation's credit reporting agencies (CDIA) - of course - has immediately warped into maximum "spin mode" re the FTC's study. One CDIA counter-claim: "The study also showed that 95 percent of consumers are unaffected by errors in their credit report..." Much depends upon what is defined (by consumers vs. CDIA) as a "material error" (on reports), but even if "only" five percent of consumers are materially affected (by CDIA's admission), that is approx. 10 million reports.
Plus, CDIA responses (thus far) are not directly addressing the difficulties a majority of the FTC study participants encountered with successfully correcting some/all inaccuracies on their reports. (Source URL: http://redtape.nbcnews.com/_news/2013/02/11/16926686-ftc-five-percent-of-credit-reports-contain-serious-errors-that-cost-consumers?)

[Jenny4502]

The solution to this problem is fairly obvious. If enough people sued them in federal court, it would cost them so much money that they would have to fix this issue. Most people make the mistake of spending years and years calling them, writing them, and attempting to resolve the problem by using their websites. Skip that nonsense and go right for their throats. File a lawsuit against them for violating the Fair Credit Reporting Act. Nothing else will get their attention.

[creditmess]

Jenny4502 is right! They expect people to be sheep and follow their directions. Filing a lawsuit will get their attention and get it fast. You can do it yourself by filing in small claims court. You don't need a lawyer to do this. There are several guides out there but this one from AttorneyXX.com seems to be the most detailed. http://attorneyxx.com/wp/fcra-ebook/

[Bill659]

Credit ratings dictates your life. From car insurance to getting a loan are getting a job. Why is it when you apply for a loan are car insurance or work the credit report they have is different from the one you received from the 3 credit reporting agencies ?
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Maybe because it benefits them ?
1. Higher interest rate ?
2. Higher car insurance ? What does my credit report have to do with my driving record ?
3. Denied employment ?
4. Why don't we have the same report ?
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We are held ACCOUNTABLE for paying taxes, car insurance amd loans and we must not forget student loans. If we do not pay our taxes are loans and have car insurance there is consequences. But the 3 credit reporting agencies are not ACCOUNTABLE and the creditors.
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Maybe congress would tell me why the credit reporting agencies are not ACCOUNTABLE ??????? In my opinion congress is on a entitlement program. This is not the first time this matter about the credit repoting has been question. But we keep paying higher interest rates and car insurance or denied a job. And congress is still do nothing about it. WHY ?
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I thank you 60 Minutes and Steve Kroft.