Even a small inaccuracy on a consumer’s credit report can have long-lasting negative affects. From the most simple computer error to mixing up individual’s data, credit reporting agencies have been known to be hard to work with when trying to fix incorrect data. But that could all change under legislation introduced today that aims to ensure issues like these don’t happen.
Today, Senators Brian Schatz of Hawaii and Sherrod Brown of Ohio introduced the Stop Errors in Credit Use and Reporting (SECURE) Act of 2014, which would require credit bureaus to follow tighter rules for ensuring credit reports are accurate and give consumers free access to reliable credit scores each year.
Credit reports and credit scores are often used by bankers, lenders, and others to determine a consumers’ creditworthiness and the rates they will pay for services. Today, the scores and reports are even used to determine a consumer’s employability.
A Federal Trade Commission study found that nearly one in five, or 40 million consumers, have had an error on one of their credit reports. Of those, nearly 5% or 10 million consumers had errors that would likely lead them to paying more for interest on a loan.
The problem is compounded by the fact that it’s difficult for consumers to prevent and correct errors on their credit reports. The SECURE Act proposes to revamp the current Fair Credit Reporting Act and make common sense fixes to the credit reporting industry.
SECURE establishes clear procedures for assuring accuracy of all consumer reports furnished by Consumer Reporting Agencies:
• Requires CRAs to pass along documentation sent by consumers to data furnishers and requires data furnishers to consider the documentation in their re-investigation;
• Requires CRAs to gather and report information on disputes and their resolution;
• Directs the Consumer Financial Protection Bureau to establish minimum procedures that a CRA must follow to ensure maximum possible accuracy of consumer reports;
• Prevents CRAs from ignoring new or additional information provided by a consumer that is relevant to an on-going dispute.