Fewer than one in five people obtain copies of their credit reports each year to check up on potentially negative items. This creates a situation where potential borrowers are unaware of hidden obstructions to obtaining desirable interest rates, the Consumer Financial Protection Bureau suggested in a report Wednesday.
The consumer agency released a report on the experiences of borrowers who deal with the nation’s three largest credit rating agencies, Equifax, Experian and TransUnion.
Since credit ratings often determine a borrower’s ability to take out a mortgage or another consumer loan, the CFPB is studying the practices of credit bureaus and borrowers.
About half of the trade lines in the bureaus’ databases are provided by credit card agencies, the CFPB explained. More than a third of disputes have to do with collections while most information in the reports come from the nation’s largest banks and financial institutions.
The CFPB says the top 10 furnishers of credit data provide about 57% of the information that ends up in the credit bureaus’ databases.
Click here to download the full report.