The CFPB cited a wide variety of violations ranging from failure to investigate and correct credit report errors, failure to inform customers of investigation results, and selling inaccurate credit report scores. This action follows the agency’s lawsuit against Experian announced earlier this week for similar issues. 

The agency found that Equifax ignored consumer documents and evidence submitted in credit disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores.

What you can do to protect your credit

Credit reports are used for more than just getting a loan or a line of credit these days. Having errors on your credit report could not only prevent you from taking out a new credit card, but also interfere with getting a new job or a new apartment. 

Matt Schulz, chief credit analyst at LendingTree and author of “Ask Questions, Save Money, Make More: How To Take Control Of Your Financial Life”, has seen the damage mucked-up credit reports can do. 

“There’s little in life that’s more expensive than having crummy credit,” says Schulz. “It can cost you tens of thousands of dollars or more over the years in higher interest rates and fees and such. The last thing you want is for someone else’s mistake or fraudulent behavior to hold your credit score down unnecessarily, but that’s the situation for many Americans today.”

Consumers will find it much easier to fix errors in their credit reports before they escalate and cause real problems. Here’s what you can do to protect yourself. 

Keep an eye on your credit reports

Make it a habit to review your credit reports from Equifax, Experian, and TransUnion. You can get these for free at annualcreditreport.com. Typically, you’re entitled to one free report from each bureau annually, but they’ve been offering weekly access since the pandemic began.

Schulz suggests freezing your credit if you aren’t actively opening new accounts. “Implementing a credit freeze keeps creditors from accessing your report.” You can easily unfreeze your credit when you’re ready to apply for new loans or credit cards. 

File a dispute if necessary

If you spot something that doesn’t look right, gather your evidence and file a dispute promptly. Think of it as protecting your financial reputation—it’s worth the effort.

All three major credit bureaus—Equifax, Experian, and TransUnion—allow you to file disputes online, by phone, or mail. While you’re waiting for the credit bureau to process your dispute, you can also reach out to the company that reported the incorrect information. This two-pronged approach might help resolve the issue more quickly.

Remember, the credit bureaus generally have up to 45 days to investigate your dispute. If they make changes based on your dispute, you’re entitled to a free copy of your updated report.

The takeaway

By acting against both Equifax and Experian, the CFPB is sending a clear message: Credit bureaus are playing fast and loose with consumers’ information. The only way to protect yourself is by being proactive with your credit report. 

 “Building good credit isn’t easy,” Schulz says. “It is a marathon rather than a sprint. Don’t let others’ screw-ups or bad behavior undo the good work you’ve done over the years. There’s too much riding on it.”