- USA Finance Trends

Freezing your credit score report has lengthy been thought to be the most effective steps to take to verify identification thieves can’t receive loans or bank cards in your identify.

And client advocates proceed to advocate freezes regardless of current revelations that TransUnion, one of many three main credit score bureaus, botched “tens of hundreds” of freeze requests over a interval of years.

“It’s nonetheless a good suggestion to freeze your credit score,” stated Mike Litt, director of the patron marketing campaign at PIRG, a community of public curiosity advocacy teams.

The Client Monetary Safety Bureau earlier this month ordered TransUnion to pay $8 million for deceptive shoppers who believed they had been protected by freezes however weren’t as a result of the corporate’s laptop methods had been overwhelmed by requests and did not activate them, in keeping with an administrative settlement between the bureau and TransUnion and two subsidiaries. The full features a $5 million penalty and $3 million to compensate prospects.

Some freezes went unprocessed for only a few days, the bureau stated, however in different cases, hundreds languished for months or years. “These shoppers didn’t find out about this failure,” the settlement stated, “and a few had been instructed that their requests had been honored after they had not.”

The buyer bureau, in a statement, described TransUnion as “mendacity” to shoppers concerning the standing of their freezes in addition to about their requests to quickly raise the freezes after they utilized for credit score.

TransUnion neither admitted nor denied wrongdoing, in keeping with a settlement document. In an emailed assertion, the corporate stated it corrected “related system points” in 2020. “TransUnion is dedicated to serving to shoppers handle their credit score data, and we enacted enhancements to make sure well timed placement and elimination of safety freezes and locks,” the assertion stated. (A credit score “lock” is just like a freeze however is often a part of a bundle of companies supplied to prospects, generally for a payment.)

The buyer bureau declined to touch upon whether or not freeze issues had additionally occurred on the different two credit score bureaus, Equifax and Experian, or whether or not it was taking a look at their practices. Equifax and Experian didn’t reply to requests for remark.

A credit freeze, additionally known as a safety freeze, restricts entry to your credit score report. These reviews element your borrowing and fee historical past and are utilized by lenders to find out whether or not you qualify for credit score and what rate of interest you’ll pay. They’re additionally used for different functions, like background checks by potential employers and landlords. Customers must freeze their reviews at every of the three main credit score bureaus. If you wish to apply for brand new credit score, you’ll be able to quickly “thaw” or raise the freeze over the telephone, on-line or by mail.

Beginning in 2018, the federal authorities required the large credit score bureaus to supply freezes at no cost. (Beforehand, the bureaus charged a payment, besides in some states that mandated that the freezes be supplied free). Credit score bureaus had been additionally given strict timelines for enacting a requested freeze or raise: in the future for freeze requests and one hour for raise requests when made on-line or by telephone, and three enterprise days if made by mail. (Till then, the timing necessities for freeze requests had been set by states and different, the bureau stated.)

TransUnion’s databases have struggled to course of “well timed” requests for client freezes and lifts at the very least since 2003, the patron bureau stated, main the corporate to deal with some requests manually to maintain up. Then, after a significant knowledge breach at Equifax in 2017, shoppers’ issues about identification theft prompted demand for credit score freezes to surge. Simply earlier than the breach was introduced, in July and August of 2017, TransUnion acquired about 33,000 freeze requests, the bureau stated. Within the two months after, September and October 2017, it acquired greater than two million. Consequently, TransUnion’s backlog of unprocessed freezes “steadily collected and had been left unresolved for years,” the patron bureau discovered. The backlog reached practically 30,000 by the top of 2019.

The absence of a freeze left some shoppers doubtlessly susceptible to fraud, though a bureau spokesperson stated it was unclear if anybody was financially victimized due to a delayed freeze. And many individuals who thought they’d lifted a freeze didn’t study that one remained on their TransUnion report till they had been making use of for credit score, the bureau stated. Individuals complained that they had been denied credit score, or had been vulnerable to being denied, due to the snafu, the bureau stated.

TransUnion started fixing its system issues, the bureau stated, solely after it was notified in early 2020 that the bureau would start scrutinizing the corporate’s freeze practices.

Individually, the patron bureau and the Federal Commerce Fee collectively reached a settlement this month in a civil grievance filed in Federal District Court docket in Colorado in opposition to TransUnion and its tenant-screening unit for failing to make it possible for background checks executed for landlords had been correct. Tenant-background screenings sometimes embrace a standard credit score report in addition to a search of public information for evictions and felony convictions.

In some instances, the agencies said, screening reviews rendered the a number of steps of a single eviction course of as separate evictions, making the document seem worse than it was. In others, reviews did not say if an eviction case was dismissed.

TransUnion agreed to pay $11 million to shoppers and a $4 million penalty in addition to to verify it correctly reviews eviction knowledge. TransUnion once more admitted no wrongdoing, and stated it has labored with the F.T.C. and the patron bureau to “improve” its rental screening practices, together with with modifications to how eviction information are reported. “We imagine these modifications will quickly grow to be business normal,” it stated in an emailed assertion.

Listed below are some questions and solutions about credit score freezes and tenant screening:

How do I freeze my credit score report?

It is best to place a freeze at every of the three massive credit score bureaus by contacting each individually. You are able to do it on-line by creating an account, by calling or by mail. The federal authorities supplies hyperlinks to every bureau at usa.gov. Even if in case you have a freeze, it’s nonetheless a good suggestion to proceed checking your credit score report frequently to verify nothing is amiss, stated Chi Chi Wu, a senior lawyer on the Nationwide Client Regulation Heart. You’ll be able to verify your reviews weekly for gratis at www.annualcreditreport.com.

Ought to I verify my tenant screening report earlier than making use of for housing?

There are numerous tenant screening firms, and most gained’t have data on you forward of time, the patron bureau stated. However in the event you apply for rental housing and are rejected due to data in a screening report — or if the owner imposes particular situations, like paying a better deposit or utilizing a co-signer — the owner should notify you and supply the identify of the screening firm it used. You’ll be able to contact the screener to verify your data and dispute any errors. It is best to, nonetheless, verify your credit score report earlier than making use of, the bureau stated, since firms sometimes do a credit score verify as a part of the tenant screening course of. The bureau maintains a listing of screening companies on its web site and gives recommendation on how to check a screening report.