THE U.S. CREDIT REPORTING SYSTEM: ELEMENTS, INFRASTRUCTURE, AND KEY PROCESSES

THE U.S. CREDIT REPORTING SYSTEM: ELEMENTS, INFRASTRUCTURE, AND KEY PROCESSES

CONTENTS

PREFACE

Chapter 1 KEY DIMENSIONS AND PROCESSES IN THE U.S. CREDIT REPORTING SYSTEM: A REVIEW OF HOW THE NATION’S LARGEST CREDIT BUREAUS MANAGE CONSUMER DATA

PURPOSE AND EXECUTIVE SUMMARY

KEY LEARNINGS

1. INTRODUCTION

2. CREDIT BUREAUS, CREDIT FILES, CREDIT REPORTS, AND CREDIT SCORES

2.1. Credit Bureaus

2.2. The Contents of Consumer Credit Files

2.2.1. File Components

2.3. Credit Reports

2.4. Credit Scoring

3. FURNISHERS AND USERS

3.1. Trade Line Furnishers

3.1.1. Furnisher Incentives and Disincentives

3.1.2. Reporting Format

3.2. Public Record Collection

3.2.1. LNRDRS Data Retrieval

4. FURNISHER AND DATA SCREENING

4.1. New Furnisher Screening

4.2. Checking Furnished Data

4.3. The Furnisher Rule

5. COMPILING CREDIT FILES: “MATCHING”

5.1. Identifying the Correct Consumer

5.2. Posting and Organizing Account Information in Consumer Files

5.2.1. Flat File Systems

5.2.2. PINning Technology

6. INACCURACIES IN CREDIT FILES AND CREDIT REPORTS

6.1. Types of Inaccuracies in Credit Files and Reports

6.2. Causes of Credit File Inaccuracies

6.3. Consumer Impact of Inaccuracies

7. DISPUTING CREDIT REPORT ERRORS

7.1. Credit Bureau and Furnisher Disputes

7.2. Trade Line Dispute Rates

7.3. Resolving Trade Line Disputes: The e-OSCAR System

7.3.1. The Dispute Process

7.3.2. Limitations of the e-OSCAR Process

7.4. Public Record Disputes

8. MONITORING AND MEASURING CREDIT REPORTING ACCURACY

8.1. The FTC’s National Study of Credit Report Accuracy

8.2. Industry Research

8.3. Consumer Advocate Sponsored Research

8.4. Future Accuracy Measurement and Related Metrics

GLOSSARY

APPENDIX. E-OSCAR DISPUTE CODES

End Notes

Chapter 2 PREPARED REMARKS ON CREDIT REPORTING BY RICHARD CORDRAY, DIRECTOR OF THE CONSUMER FINANCIAL PROTECTION BUREAU

Chapter 3 FAIR CREDIT REPORTING ACT: RIGHTS AND RESPONSIBILITIES

SUMMARY

INTRODUCTION

INFORMATION INCLUDED IN CONSUMER CREDIT REPORTS

PERMISSIBLE USES OF CONSUMER CREDIT REPORTS

CONSUMER RIGHTS

RESPONSIBILITIES OF CONSUMER REPORTING AGENCIES

RESPONSIBILITIES OF FURNISHERS OF INFORMATION

REQUIREMENTS FOR USERS OF CONSUMER REPORTS

IDENTITY THEFT PROVISIONS

End Notes

Chapter 4 REPORT TO CONGRESS ON THE FAIR CREDIT REPORTING ACT DISPUTE PROCESS

EXECUTIVE SUMMARY

I. INTRODUCTION

II. BACKGROUND

A. The Actors

B. Consumer Reports

C. FCRA Dispute Duties

III. THE REPORTING PROCESS

A. Reporting Requirements

B. Reporting Formats

IV. THE DISPUTE PROCESS

A. Consumer Reviews Consumer Report and Conveys Dispute to CRA

B. CRA Processes Dispute

C. CRA Forwards Dispute to Furnisher

1. How CRA Conveys Dispute to Furnisher

2. “All Relevant Information”

D. Furnisher Investigates and Sends Response to CRA

1. Furnisher’s Investigation

2. Furnisher Communicates Results to CRA

3. Furnishers’ Response Times and Rates

E. CRA Communicates Reinvestigation Results to Consumer

F. Consumer Disputes Information Directly to Furnisher

G. Commenters’ Overall Views on the Dispute Process

V. FCRA ENFORCEMENT

CONCLUSION

APPENDIX A. TABLE OF NAMES AND ACRONYMS

APPENDIX B. SAMPLE AUTOMATED CONSUMER DISPUTE VERIFICATION FORM

APPENDIX C. FREQUENCY OF CREDIT ACCOUNT DISPUTES IN FEDERAL RESERVE BOARD STUDY OF DATA FROM ONE REPOSITORY AS OF JUNE 30, 2003

APPENDIX D. RESPONSE RATES OF FURNISHERS RESPONDING TO ONE REPOSITORY THROUGHE-OSCAR AND FURNISHERS RESPONDING INPAPER FORM (JULY 2004)

APPENDIX E. THE FCRA AFTER THE FACT ACT

End Notes

INDEX

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