These financial firms spark the most consumer complaints, report shows

The three major credit reporting agencies have long drawn scrutiny for their practices, but Americans are growing more frustrated with the nation's Big Three as evidenced by the record number of complaints sent to the U.S. government's consumer protection agency, according to a new tally.

More than 800,000 complaints poured into the Consumer Financial Protection Bureau in 2022, up 61% from 2021, according to a March analysis from the U.S. Public Interest Research Group. The increase comes as the Biden administration has proposed launching a new public credit reporting agency to compete with Equifax, Experian and TransUnion, the three largest credit bureaus.

• TransUnion: Complaints about TransUnion totaled 186,802, up 183% from 2021, the PIRG analysis found. TransUnion complaints account for 23% of all complaints Americans filed with the CFPB last year. 
  
• Equifax: Consumers sent in 184,666 complaints about Equifax last year, up 24% from 2021. Equifax, Experian and TransUnion combined accounted for 69% of all complaints Americans filed with the financial bureau, according to the PIRG analysis.
  
• Experian. Americans filed 177,768 complaints about Experian last year, up 334% from 2021. 
  

"I've studied credit reporting complaints for over 30 years, yet I cannot comprehend how little the credit bureaus' poor treatment of consumers has changed," said Ed Mierzwinski, senior director for federal consumer programs at U.S. PIRG Education Fund, in a statement. "When Americans describe a system rigged against them in the stories they file into the CFPB database, it's unfortunately not surprising -- I've seen it all before."

Here are the most common problems consumers described related to their credit reports, according to the consumer advocacy group. 

Incorrect information

The CFPB received 229,638 complaints last year about inaccurate information on someone's credit report, PIRG found. Errors on credit reports can lead to lower credit scores, resulting in higher costs for consumers and making it harder to get loans.

Credit score concerns ballooned to three-quarters of all complaints in the first half of 2022, up from slightly more than half of all complaints sent to the federal agency in 2020 and 2021, the nonprofit consumer advocacy group found. 

Wrote one consumer to TransUnion in a redacted complaint included in the PIRG analysis:

"Recently, I did an investigation on my credit report which cause severe XXXX upon me and found unverifiable, invalidated, inaccurate, and questionable items that your agency didn't make sure it was reporting 100% correct."

Improper use of credit reports

The second-most common complaint is the improper use of credit reports, which tallied 210,792 complaints from Americans last year. That includes a lender checking someone's credit score without the consumer's prior consent. 

"This is an unfair system …" read one of several complaints posted by a CFPB official and shared in the PIRG analysis. Others included, "The credit reporting system is broken," and "This entire process is stacked against us as consumers …"

Problems getting errors fixed

Making matters worse, consumers also report having difficulty getting credit bureaus to correct errors. In a 2022 blog post, CFPB Deputy Assistant Director Darian Dorsey said the agency has "heard from consumers who expressed frustration that their attempts to have information corrected were ignored, seemingly tossed aside never to be heard from again." 

One redacted consumer complaint to Equifax read:

"Hello my name is XXXX XXXX and XXXX have been reaching out to all three credit bureau's via mail trying to resolve this debilitating issue for the past 7 months to no available."

The PIRG analysis reveals the CFPB fielded 153,539 complaints about the credit bureaus not actively investigating an inaccuracy on someone's report. 

Federal lawmakers are aware of the issue. Senators Elizabeth Warren, D.-Massachusetts, and Mark Warner, D.-Virginia, and Rep. Raja Krishnamoorthi, D.-Illinois, pressed Equifax last August to explain why the company allowed hundreds of thousands of consumers to have incorrect information on their credit report and failed to fix the errors.