(Corrects that John Ulzheimer worked at a credit bureau but was
not an executive, paragraph 5)
By Mitch Lipka
July 16 The federal Consumer Financial
Protection Bureau (CFPB) is about to start supervising credit
reporting bureaus, specifically, the companies that collect
information about your borrowing and payment history.
Consumers have a lot at stake when it comes to the
information contained in the reports they assemble. What's in
them can determine whether you will be approved, for instance,
for a mortgage. And the information will be used to factor your
credit score, which helps lenders determine your credit
worthiness and what interest rate you qualify for. It could also
impact getting an apartment or a job.
"Mistakes in credit reports, or fraud caused by identity
theft, can make borrowing more expensive or prevent consumers
from getting credit," the CFPB says.
The involvement of the government in regulating this
industry highlights what's at stake for consumers, particularly
when problems they run into are caused by errors (see link.reuters.com/ryn49s).
And it serves as a reminder to people to pay attention to their
"Errors happen in any industry," says John Ulzheimer,
president of consumer education for Smartcredit.com, and a
former credit bureau employee. "The difference is when someone
makes an error on my credit report, it can cost me money or a
Consumers should have some peace of mind that the government
will be policing the industry, Ulzheimer says, but the CFPB's
involvement should also signal a wake-up for consumers to be
Here are answers to some common questions about credit
1. When you see ads for free credit reports, is that what
the government means when they suggest I get my free report
No. Most of those ads are for credit monitoring services -
something consumer advocates say most people don't need. You
need not buy credit monitoring to get a free report. The only
official site that allows consumers access to the credit reports
produced by the largest three credit bureaus - Equifax,
Experian EXPNF.UL and TransUnion - is
Too few people take advantage of this free service,
Ulzheimer says, noting that only 4 percent of those available
are reviewed. You are entitled to get one free report from each
a year and many credit experts suggest you stagger that -
requesting a different one every four months so you can have the
best chance at spotting errors or someone using your identity.
2. What is in these reports?
The reports basically tell your financial story, says Bill
Hardekopf, who runs the site LowCards.com. People are often
surprised when they see just how much detail is there and,
Hardekopf notes, even more can be listed than just the basic
credit card and loan details, including when you've been taken
to collection, whether you've been late paying homeowners
association dues or whether you've applied for a payday loan. In
short, he says, you have a good reason to pay attention to
whether information in them is accurate.
3. What can happen if I leave incorrect information in my
It can take a while to fix a report, so getting an error
addressed should be a priority. Many companies use credit
reports as a screening tool for potential employees. So, the
stakes can stretch beyond just loan applications. The CFPB notes
that some 400 companies buy, augment and then sell credit
reporting data. That means an error can get distributed over and
4. If I get my report, what should I look for?
Be sure that what's in the report is about you, suggests the
CFPB. Verify that all the addresses that are included were
places you lived or were associated with. Also, look for items
that should not be there such as a bankruptcy that is more than
10 years old, or any duplicated information.
5. What if I find mistakes?
Every credit report should have contact information for the
credit reporting agency and a means to dispute what is included.
It should also include information that explains how to dispute
information you believe to be inaccurate.
6. Does getting a free credit report mean I can also get a
free credit score?
No. Credit scoring is something consumers typically have to
pay for. But the CFPB says it is more important to pay attention
to the contents and accuracy of your credit report than your
"The information in your credit report influences your
credit score," according to the CFPB. "Even if you do buy your
credit score, it is likely that the score the lender buys will
be different from the score that you buy. If you decide to
purchase your credit score, you are not required to purchase
credit protection, identity theft monitoring or other services
that may be offered at the same time."
(Follow us @ReutersMoney or here.
Editing by Beth Pinsker Gladstone; Desking by Andrew Hay)