CFPB releases new procedures for examining credit reporting

The federal agency tasked with helping consumers to better protect their finances recently unveiled new rules for evaluating companies that report consumers' credit in various ways, in hopes of streamlining the process.

The Consumer Financial Protection Bureau's new Consumer Reporting Examination Procedures document outlines the new ways in which the agency's employees will evaluate companies that issue credit ratings and reports, as well as other participants in the market. The purpose of the new rules is to give CFPB workers a better understanding of what to look for when making sure companies that deal with consumers' credit and reporting are doing all they can to make sure the information contained on those documents is accurate.

Specific procedures
There are a number of actions CFPB inspectors are now required to take when evaluating credit reporting agencies' compliance with federal regulation, the document said. For instance, in addition to having proper "reasonable procedures" in place for determining that consumer data is fully accurate, companies in charge of these kinds of reports will also have to provide channels through which consumers can report and dispute potential problems they encounter when dealing with these documents.

This should also include reviews of the metrics these companies use to evaluate the quality of the data they handle, including how information from third parties is screened and confirmed, the document said. Further, reviewers must assess whether there are protocols companies have in place to ensure no duplicate data shows up on a consumer's credit report.

Employees that can help
Further, companies should also have to ensure that they are disclosing information for consumers who request it, the document said. In addition, they must have staff on hand who are fully trained in taking the time to explain the data contained on the documents they issue to any consumers who request more information about their personal financial documents.

Larger participants in the industry must also be able to prove that they are taking all possible efforts to make sure no consumers are being affected by identity theft, the document said. This is especially true for military members who are currently serving active duty, who can obtain special alerts to ensure that their credit reports are not being altered by any type of fraud.

Compliance with credit reporting laws
Federal rules now state that credit reporting companies are required to issue consumers one free copy of their credit report and possibly other data in certain circumstances, the document said. For instance, consumers now have access to a free copy of their credit report from each of the three major bureaus every year, but companies who have been furnishing reports to third parties "on a continuing basis … for the last 12 months" must do so as well.

The inspectors must also determine whether the company they're inspecting is issuing these reports in a timely fashion, defined as 15 days or fewer after the date upon which it received the request, the document said. These companies must also make it easy for consumers to obtain these documents, such as with a standardized request form on their websites, and making more information available as part of a "frequently asked questions" or help page. Companies should also have toll-free hotlines or single mailing addresses where consumers who are not online can request copies of their credit reports.

For consumers who request a copy of their credit report but whose information cannot be verified or processed by an agency, there must also be procedures in place to notify that person, and work with them to obtain more complete data or documentation, the document said.

Meanwhile, in many cases, companies will also be required to verify procedures for how they provide disclosures of credit information when consumers have adverse action taken against them, the document said. These actions, which include being turned down for a line of credit, entitles consumers to receive a copy of the information used to determine their eligibility within 60 days or either receive the adverse notice or be notified by a debt collection agency.

Of course, when consumers have questions about their credit, or need help in resolving some potentially unfair markings they may have discovered on their credit report after requesting such a document, there are other places to turn.

For instance, contacting a credit repair service may help you to get whatever questions you have answered and potentially correct any unfair markings that may be having a negative effect on your overall credit standing. This will help to ensure that your credit score is where it needs to be when you seek out new lines of credit, potentially giving you access to the best possible deals available to you.

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