Your credit report has an enormous impact on your financial future. Banks, credit card companies, and employers all reference credit reports when they decide whether to make a loan to a potential customer or offer a job to a prospective employee. That is why it’s critical that credit reporting agencies maintain and provide accurate credit information about consumers.
Yet too often millions of Americans have errors — not of their own making — on their credit report. Making matters worse, these mistakes can be nearly impossible to fix. A 2013 study by the Federal Trade Commission (FTC) found that one in five consumers had an error on their credit report. While some errors are minor, others are financially devastating. One in 20 Americans has an error on their credit report serious enough to raise costs or make it harder to take out a loan.
American consumers shouldn’t have to pay the price for errors made by credit reporting agencies.
I recently introduced the Stop Errors in Credit Use and Reporting (SECURE) Act to ensure that all have accurate information on their credit report to ensure they are being treated fairly.
The SECURE Act would require credit reporting agencies to improve their processes for collecting and matching consumer credit information and hold them accountable by requiring agencies to inform the Consumer Financial Protection Bureau (CFPB) about the consumer complaints they’ve received and their resolutions. If agencies’ sloppy reporting practices cause widespread errors, the FTC would have new power to impose penalties.
The Act would also give consumers the tools they need to make informed financial decisions and to correct the record if there are errors on their report. Consumers would finally be able to request a free credit score each year, and they would automatically receive and a free credit report with the information their lender saw if they are denied a loan or given an unfavorable interest rate because of their credit history. And consumers disputing an error on their credit report would be able to request that a judge order the credit reporting agency to stop using a practice that causes inaccuracies.
Ohioans’ financial futures should not be held hostage by an inaccurate credit report or credit score. The SECURE Act finally gives consumers the tools they need to correct the record on their financial past and make the right decisions for their financial future.
Sherrod Brown is a U.S. Senator for the state of Ohio.