Equifax, Trans Union, and Experian are the three primary consumer reporting companies in the United States. There are actually many other smaller credit reporting companies as well but they tend to get lost in the financial shuffle. The fact that there are three major credit bureaus to begin with is one of the biggest problems for consumers.
This is not at all comparable to there being The Big Three in automobile manufacturing. I know, the Big Three are now The Little Three, but bear with me on this analogy. Just because there are three or six major car companies does not mean that when you have a problem with your car that you have to deal with all of them, right?
In the antiquated world of credit report technology, however, you do in fact have to deal with all three credit reporting companies. It is not right and this causes endless problems for consumers.
- How many credit report problems (or nightmares as I have referred to them in the above title)?
Most estimates suggest a conservative number of 5 percent of individuals with serious errors. My personal estimate is a much higher number that is in the range of 10 to 25 percent. Just as banks will never issue a press release saying how much financial trouble they are in, a credit bureau does not advertise that 20 percent of their credit data is wrong.
If you think that nightmare is an excessive description for this situation, please get back to me after you have your first serious consumer report mistake to deal with and let me know what word you would suggest instead. I am going to stick my neck out and assume that a woman named Julie Miller in Oregon would back me up on my use of the "nightmare" terminology. The same goes for the judge who recently awarded her over $18 million in damages because of the the awful long-term treatment that she received at the hands of Equifax.
The fact remains that consumers can still do everything right and have their financial life ruined by one credit bureau. When there are credit report mistakes, individuals have to deal with each consumer report company separately. It is not unusual for a credit information problem to be fixed by one company or even two, but there is often a "holdout" which refuses to do the right thing. Julie Miller's holdout was Equifax, but it could just as easily have been Experian or TransUnion.
This particular problem (nightmare) appears likely to get worse before it gets better. Do you know where your credit data is?