A Consumer Financial Protection Bureau (CFPB) report determined consumers residing in Black and Hispanic neighborhoods as well as younger consumers and those with low credit scores more commonly reported disputes.
“Families living in majority Black and Hispanic neighborhoods are far more likely to have disputes of inaccurate information appear on their credit reports,” CFPB Director Rohit Chopra said. “Error-ridden credit reports are far too prevalent and may be undermining an equitable recovery.”
The CFPB indicated the analysis stems from a series of reports examining consumer financial marketplace trends through data on auto loans, student loans, and credit card accounts opened between 2012 and 2019.
Black and Hispanic neighborhoods face challenges with credit records. CFPB noted, with regard to auto loans, student loans, credit cards, and retail cards, consumers residing in majority Black areas were more than twice as likely to have disputes appear on their credit reports in comparison to consumers residing in majority white areas.
Additionally, as it specifically relates to auto loans, officials indicated the research showed that consumers in most Black areas were more than three times more likely to have disputes appear on their credit reports.
The CFPB said that consumer reporting companies are required to timely process and investigate credit report disputes and correct inaccuracies discovered by the investigation under the Fair Credit Reporting Act.