Shedding Light on the Credit-Reporting Industry

Whether it’s after a shopping spree or before you make it big purchase, it's probably a wise move to check your credit report. You can get a free credit report from each of three largest credit bureaus (Equifax, Experian, and TransUnion) once a year at

Your credit report—which shows how much you owe on credit cards and your mortgage and other loans, and whether you pay your bills on time—can have a major impact on your life: When you apply for credit, buy insurance, or rent a home, your getting approved and the rates you’ll pay are determined by your credit score.

But the credit-reporting industry is notoriously murky and confusing to many consumers, and a study by the Consumer Financial Protection Bureau attempts to shed some light on it.

The CFPB found that credit-card companies supply most of the account information used to create your credit report. It also noted that fewer than one in five people bother to get copies of their credit report each year. This is troubling, because your report helps you to not only figure out your finances but also to spot errors that a lender might have made or evidence that someone has been running up charges under your name. If you don’t check your report, you might discover the mistakes only after you’ve been denied credit.

This study is the latest effort by the CFPB to take some of the mystery out of credit reporting as the bureau steps up its oversight of the industry.

We welcome the move. An industry that has such an enormous influence on your financial life should be easier to understand, and the information it offers should be more helpful, accessible, and accurate.

With all the information packed into your report, you might expect your three-digit credit score to be included. Unfortunately, it’s not. To get a credit score from one of the leading credit bureaus, you typically have to pay for it. And to make things even more frustrating, another CFPB study (PDF) says the score you buy could be significantly different than the one that lenders use.

Consumers Union believes that requiring credit score to be included in your free credit report will make credit reports work better for consumers and will continue to work towards that goal.

For more information on how to get your free credit report and tips on how to fix any errors, visit Consumers Union’s “How to Get Your Free Credit Report” at


If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. Having documentation is important for your records but also protects you in case a creditor changes their mind.

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