Credit reporting

The Consumer Financial Protection Bureau said it found deficiencies in how credit-reporting companies handle complaints about consumer data.

The use of rent data in credit models is allowing people with low credit scores or thin credit files to get loans. But consumer advocates warn the use of that data could harm the very people it’s supposed to help. 

The agency issued an advisory opinion warning that credit reporting bureaus and other entities using credit checks can no longer use disclaimers to bypass privacy protections.

The use of rent data in credit models is allowing people with low credit scores or thin credit files to get loans. But consumer advocates warn the use of that data could harm the very people it’s supposed to help. 

While relatively few of these consumers have applied for mortgages recently, the findings point to an untapped market that lenders might be able to reach out to as refinancing dries up.

Esusu, a financial technology company that aims to help bridge the racial wealth gap by reporting rent payments to credit agencies, has become one of only a few Black-owned startups to reach a valuation of $1 billion after closing a Series B round led by SoftBank Vision Fund 2.

In a letter to the agency’s new director, top Senate Democrats recommended policy steps intended to limit mistakes in consumers’ credit files that they said “can ruin lives.”

Companies using only a person’s name and not other identifiers to screen job and tenant applications can produce inaccurate information, according to the bureau. The agency's advisory opinion said such practices violate the Fair Credit Reporting Act.

A report by the agency found that consumers in majority Black neighborhoods were more than twice as likely as those in white neighborhoods to lodge complaints with the credit bureaus over information in their files. Meanwhile, disputes were less common among older borrowers.

Democrats are pushing for a public-sector alternative to the three main credit bureaus, but Republicans argue that the government is ill-equipped to safely handle consumer data and produce accurate reports.

Some say Equifax, Experian and TransUnion are too slow to investigate grievances, prompting more complaints to the Consumer Financial Protection Bureau. But the big three say other forces are at work.

Complaints to the Consumer Financial Protection Bureau jumped 54% to 542,300 in 2020. Concerns about credit reports have long outnumbered those in other categories and jumped significantly as a share of the total from 2019.

After its three acquisitions since last August, the Philadelphia area-based credit data firm predicts more industry consolidation is on the way.

The bill introduced by Rep. Patrick McHenry, the top Republican on the Financial Services Committee, would expand CFPB authority to the credit reporting industry and require that certain adverse information be removed from a consumer’s credit history.

The acquisition brings the credit report provider into the commercial and residential appraisal technology space.

This deal comes a little more than two months after CIS combined with Avantus.

While Black homeownership just rose to its highest level in 16 years, it's still the lowest of any racial demographic and 29 percentage points behind white people.

How the mortgage and housing industries react to the current civil rights moment could shape policies and bridge the homeownership divide for the Black community.

The rescue bill enabled banks to protect loans in forbearance from an immediate hit to a borrower’s credit report, but experts say affected consumers may have trouble getting loans after the pandemic ends.

When a bank subscriber to Sure Profile pulls a credit report on an applicant for a loan or account, Experian will check to see if the identity data matches a real person.