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Credit reporting complaints double during pandemic

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Posted at 7:28 AM, Feb 23, 2021
and last updated 2021-02-23 15:22:09-05

There's good reason to check your credit reports right now. Consumer Reports and advocacy groups found complaints about wrong information on credit reports have nearly doubled during the pandemic.

“This is a particularly bad problem, as you can imagine. In the age of COVID, where people have lost jobs, people may be seeking to have credit limits made larger on credit cards or they may be seeking student loans or they want to purchase a home or they simply are trying to rent a different apartment, maybe a cheaper apartment, and they were coming up against problems in their credit report that they couldn't get resolved,” said Lisa Gill with Consumer Reports.

Consumer Reports believes there are more complaints in part because there is a backlog. Normally, under the Fair Credit Reporting Act, agencies have 30 days to respond to a dispute. The CARES Act gave them more time.

Another reason is many lenders are not supposed to be reporting negatively if you got behind during the pandemic, but some are.

Another historic problem with credit scores is bias. Even though they omit things like race, gender and age, lending hasn't been fair.

“Fifty years ago, companies, banking institutions in particular, practiced regularly the practice of redlining. And they simply discriminated against people seeking credit, whether it was for a mortgage or autos or other types of lending and it was based on race. I mean it was a very, very extremely unfair practice,” said Gill.

One in three black adults have no real credit history compared to about 16% of whites.

Consumer Reports is holding three different free webinars on Wednesday, Thursday and Friday on credit reporting and scores. One is specifically about race. You can RSVP on the Consumer Reports website.

Experts say you can and should also check your credit report for free weekly now on AnnualCreditReport.com.