The bill requires credit reporting agencies forward furnishers of data actual copies of the documents and all relevant information submitted by consumers disputing an error on their credit report.
A recent report by the Federal Trade Commission (FTC) found that over 25% of consumers’ credit reports contain errors, often leading to less favorable loan terms or denial of credit
Washington, D.C. – U.S. Senators Amy Klobuchar (D-MN) and Mark Begich (D-AK) and Bill Nelson (D-FL) today introduced legislation to help consumers correct errors on their credit reports. The Fair Credit Reporting Act requires credit reporting agencies to conduct reasonable investigations and provide all relevant information when a consumer disputes an item in his or her credit report as inaccurate or incomplete. A recent report by the Federal Trade Commission (FTC) found that over 25% of consumers’ credit reports contain major errors, often leading to less favorable loan terms or denial of credit.
"A simple error on a credit report can lead to higher interest rates, denial of mortgage applications and even result in someone being passed over for a job,” Klobuchar said. “This legislation will ensure that the credit reporting agencies conduct fair investigations and consider all information help prevent errors from wreaking havoc on families’ lives.”
“This is a commonsense way to make sure American consumers have an opportunity to correct errors they find on their credit reports,” said Begich. “Access to affordable credit is critical for families looking to buy a home, pay for college, or purchase a car, but an inaccurate credit report can make it difficult or even impossible to obtain these loans on fair terms. I look forward to working with Sen. Klobuchar on this issue to make sure all Americans have a transparent and accurate credit report. ”
“If a consumer has disputed something in their credit report, the information they provide should be furnished to those who are checking up on their credit,” said U.S. Sen. Bill Nelson. The Florida Democrat, earlier this year, helped fix another consumer credit issue by getting one of the nation’s biggest lenders to stop reporting short-sales as foreclosures that are more adverse to their credit standing.
Credit reporting agencies have been criticized in the past for performing lackluster investigations and providing little additional documentation to third party data furnishers. The Fair Credit Reporting Act requires credit reporting agencies conduct “reasonable” investigations when a consumer disputes an item on his or her credit reporting. This legislation ensures that the requirements of the FCRA are being met by requiring that credit agencies forward actual copies of documents submitted by consumers to data furnishers.
Klobuchar has been fighting to ensure that consumers’ credit reports are up to date and accurate. At Senate Commerce Committee hearing earlier this year, Klobuchar highlighted the serious damage credit report errors can have on financial well-being and called on the Administration and the major credit rating agencies to take action to ensure credit reports are accurate. She also held a roundtable discussion with Minnesotans who have been negatively impacted by errors on their credit reports as well as experts on the issue.