The consumer data industry—generally referred to as credit reporting agencies or credit bureaus—collects and subsequently provides information to firms about the behavior of consumers when they participate in various financial transactions.
Greater reliance by firms on consumer data significantly affects—and potentially limits—consumer access to financial products or opportunities. Specifically, negative or derogatory information, such as late payments, loan defaults, and multiple overdrafts, may stay on consumer reports for several years and lead firms to deny a consumer access to credit, a financial product, or a job opportunity. Having a nonexistent, insufficient, or stale credit history may also prevent credit access.
Accordingly, various policy issues have been raised about the consumer data industry, most notably including the following:
- How to address inaccurate or disputed consumer data provided in consumer data reports;
- How long negative or derogatory information should remain in consumer data reports;
- How to address differences in billing and collection practices that can adversely affect consumer data reports, an issue of particular concern with medical billing practices;
- How to ensure that consumers are aware of their rights and how to exercise them in the event of a consumer data dispute;
- Whether uses of consumer data reports outside of the financial services, such as for employment decisions, adversely affect consumers and should be limited;
- Whether the use of alternative consumer data or newer versions of credit scores may increase accuracy and credit access; and
- How to address data protection and security issues in consumer data reporting.