Credit Reporting History

Have you ever wondered how all that information appears on your credit report? Better yet, who is responsible for making sure the information on your credit report is accurate and correct? That is the million dollar question and you are not alone in wondering how this whole credit reporting history gathering process takes place.

There are two entities responsible for reporting your credit history, the credit bureaus and the company reporting your pay history, the information furnisher. Companies who report such information can be credit card, mortgage or auto loan companies. The credit bureau account information can only be as accurate as the information it is provided by the information furnisher. However, a credit bureau oftentimes can take correct information and report it incorrectly.

Over the years, the Federal Trade Commission has seen a reduction in the number of complaints received relative to inaccurate information on credit reports. Even though complaints have decreased, recent surveys, by numerous news sources, have found that 25 percent of credit reports contain inaccurate data serious enough to deny someone credit and 70 percent of credit reports contain some kind of inaccuracy. While it’s true the large amount of data the credit bureaus handle makes it difficult to stay on top of things, the credit bureaus are for-profit corporations who could be doing more with their profits to make sure that the data they have is accurate.

The FACTA legislation, passed in 2003, allowed consumers to directly challenge the information furnishers about information contained in their credit reports. It further stipulated that the FTC must come up with rules detailing how disputes with information furnishers must be carried out. Seven years later, in 2010, the FTC has finally published rules for information furnisher disputes. The new rules took effect July 1, 2010.

For instructions on how to dispute directly with the information furnisher, read this article on what is known as the 623 method.

Before the changes to the FCRA, consumers were not allowed to dispute negative information on their credit report with anyone but the credit bureaus. Only the most heavily wronged consumers actually fought back against the banks for refusing to correct inaccurate reporting to the credit reporting agencies.

During the period 1997 to 2002 before the laws took place, consumers had to expend money, time and resources in order to fix problems stemming from inaccurate information furnisher reporting. The burden of proof and the costs gathering this proof fell on the consumer.