A recent article by Jeff Sovern and Ira Rheingold in the New York Times explains why consumers have such a hard time fixing faulty credit reports.  A mistake on your credit report can be a big problem for you.  But such an error can be difficult to correct.

The authors point out that the Federal Trade Commission has found that at least 20% of consumers had errors in their credit reports.  A majority of those people see an improvement in their credit scores when the errors are corrected.

But as Jeff Sovern and Ira Rheingold note, credit bureaus are heavily dependent on lenders for both revenue and information.  Consumers have little power over credit bureaus.  Thus, credit bureaus have every reason to favor lender’s interests; and there is little incentive to help a consumer.  This of course does not mean a credit bureau would deliberately report a mistake.  But there is little or no incentive to assist a complaining consumer. 

New laws and regulations may be necessary to better protect consumers from errors in their credit reports.