Bad credit report where good credit is due

After applying for an apartment recently, my potential landlord, Miles Fischel, called to say something on my credit file had given him pause.

“I go, ohhhh, this one’s gonna be some trouble here,” said Fischel.

He ran a tenant background search on me using a service from the credit reporting agency TransUnion. Multiple felony convictions showed up, including illegal firearms charges. He looked more carefully at it and thought, well, that can’t be right.

“You get a feel for people,” he said. “And I just looked at this, and it just made no sense.”

The criminal convictions were news to me, too, considering I’ve never owned a gun in my life, let alone been criminally charged for having one.

He told me where the charges were from, in Tennessee, where I used to live, and gave me case numbers. I called up the Rutherford County Circuit Court clerk, just outside of Nashville. 

Turns out, they had a defendant in their system with the same first name, middle initial and last name as me. We were also born in the same year. But our similarities ended there. He’s black; I’m white. He’s got a long rap sheet, and a recent arrest warrant indicated he was homeless.

Unraveling the problem

I called TransUnion’s customer service line to try to get to the bottom of this.

A customer service representative who went by George — he wouldn’t give his last name — spoke to me. I asked him if he was troubled that TransUnion had a file on my that contained several felony convictions that don’t belong to me.

“Yes, it is troubling,” George replied.

So, why can’t they be removed, then?

“Because we have a process so that TranUnion bureau can remove it,” he said.

He told me to call back and ask for the department that deals with opening disputes, so I did.

I finally got through to a dispute supervisor based in Guatemala who goes by the name of David. While they look into it, he said, the convictions will remain on their file.

“I understand that you’re aggravated about the fact of having to deal with this inconvenience. But, as well, please try to see this from the landlord’s perceptive. They would’nt feel comfortable moving someone into their property that shows criminal records, so he needs to make sure that these don’t belong to you, sir,” David said.

Not an isolated case

This experience is far too common, said Paul Stephens, policy director at Privacy Rights Clearinghouse in San Diego.

“Consumers will often find that their dispute enters a black hole,” Stephens said.

He said criminal charges don’t appear on credit histories, but agencies such as TransUnion keep large files on consumers that contain lots if information beyond credit scores.

And there’s isn’t really a quick way to correct the file when sloppy information shows up.

This is an issue thousands of people deal with every month. According to the Consumer Protection Financial Bureau, Equifax, Experian and TransUnion are the three most complained-about companies in America. They also happen to be the three largest credit-reporting agencies.

Since 2011, the bureau has received more than 140,000 complaints. More than three-quarters of them concern incorrect information on credit files.

TransUnion, for its part, said the bureau stats are flawed, and that it’s doing everything it can to be accurate.

“Very often when the information is placed on the credit reporting agency information sheet, they don’t do the proper background check to make sure they have the right John Smith,” said Philadelphia attorney Lou Schwartz, who has sued TransUnion over this issue many times.

The federal government passed a law in 1970 called the Fair Credit Reporting Act banning banks and other entities from sending false information to credit reporting agencies.

But Schwartz said fewer than 5 percent of his clients who have trouble with them go to court.

“It’s really on the consumer to do the leg work,” Schwartz said. “And go back to the court, and pull the docket, and get the correct information that needs to be sent by certified mail to these reporting agencies so you know they have it, and, at that point, you better know that they will remove it.”

‘Garbage in, garbage out’

Stephens with the Privacy Rights Clearing House said the credit-reporting companies often use an automated process. And they pull their information from data broker companies, which are notoriously secretive about how their process corroborates information.

“Garbage in, garbage out is basically the situation,” he said.

Legislation in Congress would establish stronger procedures to ensure that information is vetted, as well as giving consumers a better means of disputing a credit file. But it’s currently stalled.

Attorney Schwartz said the companies have been slow to change because they consider dealing with a few hundred lawsuits around the country and a mountain of complaints as part of the cost of doing business.

Meanwhile, consumers like me are left frustrated, waiting for a resolution — if one ever comes — to the company’s own internal investigation.

“Sometimes, very often, we’re dealing with serious situations where someone is not able to get a mortgage. And they better get this thing off the credit report or they’re gonna stay renting wherever they’re renting,” he said.

User-unfriendly

One of the TransUnion reps I spoke with referred me to the fine print on the files it generates. It says that they’ve done everything they can to make sure the information is correct, but that it’s ultimately up to “users” to verify.

But by “users,” they mean prospective employers, insurance brokers and landlords. And though my landlord took my word for it that I had been mixed up with someone else, what about all the decision-makers who are less gracious?

And those who are denied opportunities based on slapdash information and never realize it?

Not to mention people who don’t have the time and resources to wade into the endlessly frustrating dispute process system?

My new landlord, Fischel, said he’s always taken the consumer files with a grain of salt, because gut feeling can often be just as accurate as TransUnion.

“I rented apartments for years without doing credit checks, and I used my own personal judgment. And I did pretty good,” he said. “Couple of clunkers here and there, but even with credit checks, I had a couple of clunkers because you never really know.”

Now I’m gonna try to not be a clunker myself.