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Picture this: You and your wife find the perfect home. You’re so eager to make an offer, but before you do, you visit your mortgage banker for a pre-approval. They run the numbers, and you sit back and relax, knowing you, the meticulous bill payer and responsible card user, are in a good spot.
But then, his eyebrows furrow. He shows you an item on your credit report, it’s for a charged-off Macy’s credit card. The only problem is that you have never had a card with them. Your wife is surprised, too.
You file an appeal with the credit bureaus using the Consumer Financial Protection Bureau. You wait. Nothing happens. And this is a reality many are facing now.
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Unmasking the culprits: Identifying the drivers of declining resolutions
Here’s the issue: Mistakes on credit reports are increasing. And this is coming at a time when credit bureaus are not resolving disputes at the rate they were in the past. This can leave people with incorrect information on their report, which can hurt them financially when they need to borrow money. There isn’t a simple fix as there are multiple moving parts.
First, the number of complaints filed by the CFPB rose to a record 5.9 million in 2025. The CFPB receives complaints from customers having trouble correcting incorrect information on their credit reports. In turn, the agency will file disputes for legitimate complaints.
What’s causing the increase in complaints? A joint investigation conducted by Consumer Reports and WorkMoney found that almost half of the people who volunteered to check their credit reports discovered errors.
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Next, you have credit repair agencies flooding each of the three bureaus with sometimes erroneous disputes. What happens is these agencies promise a temporary score bump through credit washing. This is where, if the bureau cannot respond to a complaint within 30 to 45 days, it must remove the item from the credit history, even if it is accurate.
Then, there’s what’s going on inside the Consumer Financial Protection Bureau. Recently, under the new leadership of Russell Vought, the bureau has changed how customers file complaints when they find erroneous information on their credit reports. They changed the policies due to what they call a high number of illegitimate claims.
How have the policies changed? By requiring the following, per the National Consumer Law Center:
- If you want to dispute an item, you must provide personal information, such as your birth date and demographic information
- Go through two-factor authentication (where you receive a text or email code to log in), and you’re limited to how many complaints you can make per phone number
- Restricting some IP addresses from allowing the user to submit a complaint, making it harder for those without home internet access to do so
Then, there’s the effectiveness in helping customers resolve their complaints. A ProPublica investigation found a significant drop in the number of customer complaints resolved by two of the major credit bureaus.
It prompted four senators, led by Elizabeth Warren, D-Mass, Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, Tammy Duckworth, D-IL, Andy Kim, D-NJ, and Lisa Blunt Rochester, D-DE, to write letters to each bureau. In them, Warren says, “That credit bureaus are not helping customers.”
The mistake that could cost you thousands
Your credit history is your financial barometer with lenders. However, if you have inaccurate information with one and it isn’t resolved, it places you at a huge disadvantage when you need to borrow money, especially if those errors contribute to a lower credit score.
Here’s a look at how much a $25,000 car loan(assuming no money down) costs you at different interest rates:
|
Car loan for 48 months: |
2.99% APR |
7.99% APR |
12.99% APR |
|---|---|---|---|
|
Total loan costs: |
$26,544 |
$29,280 |
$32,208 |
As you can see, there’s a huge difference in total loan costs. If someone steals your information and uses it to run a few balances up, you could easily fall into the subprime category. This could cost you an extra $5,644 for this car loan alone.
How do you prevent this from happening to you?
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Thankfully, it’s easier than ever to monitor your credit health. There are tools, like myFICO, that can alert you to any changes in your credit report, such as a new inquiry or a new account opened.
Some credit cards also offer credit monitoring tools. Capital One has CreditWise, which alerts you to any score updates as well as changes in your credit profile. You can also access a free credit report from each bureau weekly through AnnualCreditReport.com.
If you notice any errors in your report, you should do the following:
- Freeze your credit while you go through the dispute process (generally speaking, it’s a good idea to keep your credit frozen all the time, except when you’re applying for something that needs a credit check, like a loan or credit card)
- Contact the bureau(s) reporting the inaccurate information and follow their dispute process
- This includes writing a letter to support your case (the FTC has an excellent sample letter as a guide)
- Send the letter via certified mail with a return receipt requested
- The credit bureau(s) have 30 days to respond
- If they deny your request, you can file an appeal
- Also, contact the lender that reported the error to file a dispute – if they determine it was in error, they’ll have the item removed for you
Keeping on top of your credit health is now more integral than ever. With errors in credit reports increasing and fewer consumer protections available, the onus is on you to stay abreast of any changes and act promptly. Doing so can save you thousands of dollars in future loan costs and protect you from incurring debt that isn’t yours.