Consumer and Credit Reporting, Scoring, and Related Policy Issues

Changes from June 2, 2020 to June 22, 2020

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Consumer Credit Reporting, Credit Bureaus,
June June 222, 2020 , 2020
Credit Scoring, and Related Policy Issues
Cheryl R. Cooper
The consumer data industry— The consumer data industry—~~generally~~general y referred to as credit reporting agencies or credit referred to as credit reporting agencies or credit
Analyst in Financial Analyst in Financial
bureaus—collects and subsequently provides information to firms about the behavior of bureaus—collects and subsequently provides information to firms about the behavior of
Economics Economics
consumers when they participate in various financial transactions. Firms use consumer consumers when they participate in various financial transactions. Firms use consumer

information to screen for consumer risks. For example, lenders rely upon credit reports information to screen for consumer risks. For example, lenders rely upon credit reports
Darryl E. Getter
and scores to determine the likelihood that prospective borrowers and scores to determine the likelihood that prospective borrowers ~~will~~ wil repay their loans. repay their loans.
Specialist in Financial Specialist in Financial
Insured depository institutions (i.e., banks and credit unions) rely on consumer data Insured depository institutions (i.e., banks and credit unions) rely on consumer data
Economics Economics
service providers to determine whether to make available checking accounts or loans to service providers to determine whether to make available checking accounts or loans to

individuals. Some insurance companies use consumer data to determine what insurance individuals. Some insurance companies use consumer data to determine what insurance
products to make available and to set policy premiums. Some payday lenders use data products to make available and to set policy premiums. Some payday lenders use data

regarding the management of checking accounts and payment of telecommunications and utility regarding the management of checking accounts and payment of telecommunications and utility ~~bills~~bil s to determine to determine
the likelihoodthe likelihood of failure to repay of failure to repay ~~small~~smal -dollar cash advances. Merchants rely on the consumer data industry to -dollar cash advances. Merchants rely on the consumer data industry to
determine whether to approve payment by check or electronic payment card. Employers may use consumer data determine whether to approve payment by check or electronic payment card. Employers may use consumer data
information to screen prospective employees to determine the likelihood of fraudulent behavior. In short, information to screen prospective employees to determine the likelihood of fraudulent behavior. In short,
numerous firms rely upon consumer data to identify and evaluate potential risks a consumer may pose before numerous firms rely upon consumer data to identify and evaluate potential risks a consumer may pose before
entering into a financial relationship with that consumer. entering into a financial relationship with that consumer.
Greater reliance by firms on consumer data significantly affects—and Greater reliance by firms on consumer data significantly affects—and ~~potentially~~potential y limits—consumer access to limits—consumer access to
financial products or opportunities. financial products or opportunities. ~~Specifically~~Specifical y, negative or derogatory information, such as late payments, loan , 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 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 consumer access to credit, a financial product, or a job opportunity. Having a nonexistent, insufficient, or stale
credit history may also prevent credit access. credit history may also prevent credit access.
Accordingly, various policy issues have been raised about the consumer data industry, Accordingly, various policy issues have been raised about the consumer data industry, ~~most notably~~ including the including the
following: following:
 How to address inaccurate or disputed consumer data provided in consumer data reports;  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 long negative or derogatory information should remain in consumer data reports;
 How to address differences in  How to address differences in ~~billing~~bil ing and collection practices that can adversely affect consumer and collection practices that can adversely affect consumer
data reports, an issue of particular concern with medical data reports, an issue of particular concern with medical ~~billing~~bil ing practices; practices;
 How to ensure that consumers are aware of their rights and how to exercise them in the event of a  How to ensure that consumers are aware of their rights and how to exercise them in the event of a
consumer data dispute; consumer data dispute;
 Whether uses of consumer data reports outside of the financial services, such as for employment  Whether uses of consumer data reports outside of the financial services, such as for employment
decisions, adversely affect consumers and should be limited; decisions, adversely affect consumers and should be limited;
 Whether the use of  Whether the use of alternative consumer data or newer versions of credit scores may increase consumer data or newer versions of credit scores may increase
accuracy and credit access; and accuracy and credit access; and
 How to address data protection and security issues in consumer data reporting.  How to address data protection and security issues in consumer data reporting.
Congress has shown continuing interest in these and other policy questions surrounding the consumer data Congress has shown continuing interest in these and other policy questions surrounding the consumer data
industry. In the 116th Congress, the House passed H.R. 3621, the Comprehensive Credit Reporting Enhancement, industry. In the 116th Congress, the House passed H.R. 3621, the Comprehensive Credit Reporting Enhancement,
Disclosure, Innovation, and Transparency Act of 2020 (Comprehensive CREDIT Act). This Disclosure, Innovation, and Transparency Act of 2020 (Comprehensive CREDIT Act). This ~~bill~~ bil includes includes
legislationlegislation from other from other ~~bills~~bil s marked up by the House Financial Services Committee: H.R. 3614, H.R. 3618, H.R. marked up by the House Financial Services Committee: H.R. 3614, H.R. 3618, H.R.
3622, H.R. 3629, H.R. 3642. 3622, H.R. 3629, H.R. 3642. In the 116th Congress, the House Financial Services Committee marked up two other bil s: H.R. 5332 and H.R. 5330. On March 27, in response to the coronavirus (COVID-19) pandemic, the President On March 27, in response to the coronavirus (COVID-19) pandemic, the President
~~signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act;~~ signed the CARES Act (P.L. 116-136). Section 4021 of the P.L. 116-136). Section 4021 of the
CARES Act addresses credit reporting CARES Act addresses credit reporting during the pandemic. The House also passed the during the pandemic. The House also passed the ~~Health and Economic~~
~~Recovery Omnibus Emergency Solutions Act (HEROES Act;~~ HEROES Act (H.R. 6800). Section 110401 of the H.R. 6800). Section 110401 of the ~~bill~~ bil would would create ~~create~~
~~Congressional Research Service~~

~~Consumer and Credit Reporting, Credit Bureaus, Credit Scoring~~

a moratorium on furnishing adverse information to credit bureaus during the COVID-19 pandemic period, a moratorium on furnishing adverse information to credit bureaus during the COVID-19 pandemic period, as wel ~~as well~~
as for other future major natural disasters. as for other future major natural disasters.
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Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues

Introduction
The consumer data industry collects and subsequently provides information to firms about The consumer data industry collects and subsequently provides information to firms about
behavior when consumers conduct various financial transactions. Firms use this data to determine behavior when consumers conduct various financial transactions. Firms use this data to determine
whether consumers have engaged in behaviors that could be costly or beneficial to the firms. For whether consumers have engaged in behaviors that could be costly or beneficial to the firms. For
example, lenders rely upon credit reports and scoring systems to determine the likelihood that example, lenders rely upon credit reports and scoring systems to determine the likelihood that
prospective borrowers prospective borrowers ~~will~~ wil repay their loans. The data may also be used to predict consumer repay their loans. The data may also be used to predict consumer
behaviors that would behaviors that would ~~financially~~financial y benefit firms. benefit firms.
Although the general public is likely Although the general public is likely to be more familiar with the use of credit reporting and to be more familiar with the use of credit reporting and
scoring to qualify for mortgage and other consumer loans, the scope of consumer data use is scoring to qualify for mortgage and other consumer loans, the scope of consumer data use is
much broader. Insured depository institutions (i.e., banks and credit unions) rely on consumer much broader. Insured depository institutions (i.e., banks and credit unions) rely on consumer
data service providers to determine whether to make checking accounts or loans available to data service providers to determine whether to make checking accounts or loans available to
individuals. Insurance companies use consumer data to determine what insurance products to individuals. Insurance companies use consumer data to determine what insurance products to
make availablemake available and to set policy premiums.1 Some payday lenders use data regarding the and to set policy premiums.1 Some payday lenders use data regarding the
management of checking accounts and payment of telecommunications management of checking accounts and payment of telecommunications ~~bills~~bil s to determine the to determine the
~~likelihood~~ likelihood that a consumer that a consumer ~~will~~ wil fail to repay fail to repay ~~small~~smal -dollar cash advances. Merchants rely on the -dollar cash advances. Merchants rely on the
consumer data industry to determine whether to approve payment by check or electronic payment consumer data industry to determine whether to approve payment by check or electronic payment
card. Employers may use consumer data information to screen prospective employees to card. Employers may use consumer data information to screen prospective employees to
determine, for example, the likelihooddetermine, for example, the likelihood of fraudulent behavior. In short, numerous firms rely upon of fraudulent behavior. In short, numerous firms rely upon
consumer data to identify and evaluate the risks associated with entering into financial consumer data to identify and evaluate the risks associated with entering into financial
relationships or transactions with consumers.relationships or transactions with consumers.
Reliance by firms on consumer data significantly affects consumer access to financial products or Reliance by firms on consumer data significantly affects consumer access to financial products or
opportunities. For example, negative or derogatory information, such as multiple overdrafts, opportunities. For example, negative or derogatory information, such as multiple overdrafts,
involuntary account closures, loan defaults, and fraud incidents, may influence a lender to deny a involuntary account closures, loan defaults, and fraud incidents, may influence a lender to deny a
consumer access to credit. Further, such information may stay on a consumer’s reports for several consumer access to credit. Further, such information may stay on a consumer’s reports for several
years. The inclusion of negative information may be particularly limitingyears. The inclusion of negative information may be particularly limiting to consumers under to consumers under
circumstances in which such information is inaccurate or needs to be updated to reflect more circumstances in which such information is inaccurate or needs to be updated to reflect more
current and possibly more favorable financial situations. Furthermore, consumers may find the current and possibly more favorable financial situations. Furthermore, consumers may find the
process of making corrections to consumer data reports to be time-consuming, complex, and process of making corrections to consumer data reports to be time-consuming, complex, and
perhaps ineffective. The exclusion of more favorable information, such as the timely repayment perhaps ineffective. The exclusion of more favorable information, such as the timely repayment
of noncredit obligations, from standard credit reporting or scoring models may also limit credit of noncredit obligations, from standard credit reporting or scoring models may also limit credit
access.access.
This report first provides background information on the consumer data industry and various This report first provides background information on the consumer data industry and various
specialty areas. The report examines one prominent specialty area—consumer scoring—and specialty areas. The report examines one prominent specialty area—consumer scoring—and
describes various factors used to calculate credit scores. Next, the report provides a general describes various factors used to calculate credit scores. Next, the report provides a general
description of the current regulatory framework of the consumer data industry. description of the current regulatory framework of the consumer data industry. ~~Finally~~Final y, the report , the report
discusses selected policy issues pertaining to consumer data reports. discusses selected policy issues pertaining to consumer data reports. ~~Specifically~~Specifical y, the report , the report
addresses policy issues concerning (1) inaccurate or disputed consumer data provided in addresses policy issues concerning (1) inaccurate or disputed consumer data provided in
consumer data reports; (2) how long negative or derogatory information should remain in consumer data reports; (2) how long negative or derogatory information should remain in
consumer data reports; (3) differences in consumer data reports; (3) differences in ~~billing~~bil ing and collection practices that can adversely affect and collection practices that can adversely affect
consumer data reports, an issue of particular concern with medical consumer data reports, an issue of particular concern with medical ~~billing~~bil ing practices; (4) practices; (4)
consumers’ rights; (5) whether uses of credit bureau data outside of the financial services, such as consumers’ rights; (5) whether uses of credit bureau data outside of the financial services, such as
for employment decisions, adversely affect consumers and should be limited; (6) whether the use for employment decisions, adversely affect consumers and should be limited; (6) whether the use
of of alternative consumer data or newer versions of credit scores may increase accuracy and credit consumer data or newer versions of credit scores may increase accuracy and credit

~~1 See CRS~~ 1 See CRS Report RS21341, Report RS21341, Credit Scores: Credit-Based Insurance Scores, by Baird, by Baird Webel. Webel.
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access; and (7) how to address data protection and security issues in consumer data reporting. For access; and (7) how to address data protection and security issues in consumer data reporting. For
each policy issue, the report addresses corresponding legislative and regulatory developments. each policy issue, the report addresses corresponding legislative and regulatory developments.
In the 116th Congress, credit reporting and the consumer data industry is a topic of interest.2 On In the 116th Congress, credit reporting and the consumer data industry is a topic of interest.2 On
January 29, 2020, the House passed January 29, 2020, the House passed ~~H.R. 3621,~~ the Comprehensive Credit Reporting the Comprehensive Credit Reporting
Enhancement, Disclosure, Innovation, and Transparency Act of 2020 (Comprehensive CREDIT Enhancement, Disclosure, Innovation, and Transparency Act of 2020 (Comprehensive CREDIT
~~Act). This legislation includes other bills~~Act; H.R. 3621). Original y a narrower bil , H.R. 3621 was amended in committee to include other bil s marked up and ordered reported by the House Financial marked up and ordered reported by the House Financial
Services Committee: H.R. 3614 (The Restricting Credit Checks for Employment Decisions Act, Services Committee: H.R. 3614 (The Restricting Credit Checks for Employment Decisions Act,
Title VI of Title VI of ~~bill~~bil ); H.R. 3618 (The Free Credit ); H.R. 3618 (The Free Credit Scores for Consumers Act of 2019, Title II of Scores for Consumers Act of 2019, Title II of ~~bill~~bil ); );
H.R. 3622 (Restoring Unfairly Impaired Credit and Protection Consumers Act, Title IV of H.R. 3622 (Restoring Unfairly Impaired Credit and Protection Consumers Act, Title IV of ~~bill~~bil ); );
H.R. 3629 (The Clarity in Credit Score Formation Act of 2019, Title V of H.R. 3629 (The Clarity in Credit Score Formation Act of 2019, Title V of ~~bill~~bil ); and H.R. 3642 ); and H.R. 3642
(The Improving Credit Reporting for (The Improving Credit Reporting for ~~All~~ Al Consumers Act, Title I and VII of the Consumers Act, Title I and VII of the ~~bill). Where~~
bil ). In addition, in December 2019, the committee marked up and ordered reported two bil s, the Protecting Your Credit Score Act of 2019 (H.R. 5332) and the Consumer Protection for Medical Debt Collections Act (H.R. 5330).3 Where relevant, this ~~relevant, this~~ report discusses the approach report discusses the approach ~~this bill~~these bil s would take to address the policy issues would take to address the policy issues
~~examined.~~
examined. When H.R. 3621 is addressed, the references are to the bil as passed by the House. Where H.R. 5330 and H.R. 5332 are addressed, the references are to the bil s after committee amendment. COVID-19 Pandemic and Credit Reporting
On March 27, in response to the coronavirus (COVID-19) pandemic, the President signed the Coronavirus Aid, On March 27, in response to the coronavirus (COVID-19) pandemic, the President signed the Coronavirus Aid,
Relief,Relief, and Economic Security Act (CARES Act; P.L. 116-136). Section 4021 of the CARES Act addressesand Economic Security Act (CARES Act; P.L. 116-136). Section 4021 of the CARES Act addresses credit credit
reporting during the pandemic. It requiresreporting during the pandemic. It requires furnishers during the COVID-19 pandemic covered period to report to furnishers during the COVID-19 pandemic covered period to report to
the credit bureaus that consumers are current on their credit obligations if they enter into an agreement to defer, the credit bureaus that consumers are current on their credit obligations if they enter into an agreement to defer,
forbear, modify,forbear, modify, make partial payments, or get any other assistance on their loan payments frommake partial payments, or get any other assistance on their loan payments from a financial a financial
institution and fulfil those requirements,institution and fulfil those requirements, provided they were current before this period.provided they were current before this period.34
Although the CARES Act protects the credit historiesAlthough the CARES Act protects the credit histories of consumers with forbearance agreements,of consumers with forbearance agreements, some some
consumersconsumers may stilmay stil experience harm to their credit record because lendersexperience harm to their credit record because lenders can choose whether to enter into an can choose whether to enter into an
assistance agreement for many types of consumerassistance agreement for many types of consumer loans. On May 15, 2020, the House passed the Health and loans. On May 15, 2020, the House passed the Health and
Economic Recovery Omnibus Emergency Solutions Act (HEROES Act; H.R. 6800). Section 110401 of the bil Economic Recovery Omnibus Emergency Solutions Act (HEROES Act; H.R. 6800). Section 110401 of the bil
would address this by creating a moratoriumwould address this by creating a moratorium on furnishing adverse information to credit bureaus during the on furnishing adverse information to credit bureaus during the
COVID-19 pandemic and for 120 days afterward, as COVID-19 pandemic and for 120 days afterward, as ~~well~~ wel as for other future majoras for other future major natural disasters.natural disasters. Although Although
these provisions would protect consumersthese provisions would protect consumers from lowerfrom lower credit scores,credit scores, the removalthe removal of information may also reduce of information may also reduce
credit scores’credit scores’ predictability in the future, which could harm somepredictability in the future, which could harm some consumers in the long term.consumers in the long term. For more For more
information on credit reporting, the COVID-19 pandemic, and the CARES Act, seeinformation on credit reporting, the COVID-19 pandemic, and the CARES Act, see the Appendix. ~~the Appendix.~~
~~The Consumer Data Industry and Specialty Services~~
~~This section provides background information on the consumer data industry, which generally~~
~~includes credit reporting agencies (CRAs), also referred to as credit bureaus (both terms are used~~
~~interchangeably in this report). This section also provides background on credit scoring, a~~

2 On February 26, 2019, the House Financial Services Committee held a hearing on the consumer data industry; see 2 On February 26, 2019, the House Financial Services Committee held a hearing on the consumer data industry; see
U.S.U.S. Congress, HouseCongress, House Committee on Financial Services, “Who’s Keeping Score? HoldingCommittee on Financial Services, “Who’s Keeping Score? Holding Credit BureausCredit Bureaus Accountable Accountable
and Repairing a Broken System,” 116th Cong., February 26, 2019. and Repairing a Broken System,” 116th Cong., February 26, 2019. ~~The~~T he Senate has also expressed interest in credit Senate has also expressed interest in credit
reporting and the consumer data industry; see U.S.reporting and the consumer data industry; see U.S. Congress, Senate Committee on Banking, Housing, and Urban Congress, Senate Committee on Banking, Housing, and Urban
Affairs, “Crapo Outlines Banking Committee Agenda for 116th Congress,” prepared by Chairman Mike Crapo, 116th Affairs, “Crapo Outlines Banking Committee Agenda for 116th Congress,” prepared by Chairman Mike Crapo, 116th
Cong., 1st sess., January 29, 2019, at https://www.banking.senate.gov/newsroom/majority/crapo-outlines-agenda-for-Cong., 1st sess., January 29, 2019, at https://www.banking.senate.gov/newsroom/majority/crapo-outlines-agenda-for-
116th-congress. 116th-congress.
3 3 H.R. 5332 and H.R. 5330 were marked up and ordered to be reported on December 1 0, 2019; see https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=404859. H.Rept. 116-416 to accompany H.R. 5332 was filed on March 12, 2020. 4 If the consumer was ~~If the consumer was~~ delinquent before the covered period, then the furnisher should maintain delinquent before the covered period, then the furnisher should maintain ~~the~~th e delinquent status delinquent status
unlessunless the consumer bringsthe consumer brings the account or obligation current. the account or obligation current. ~~The~~T he covered period starts on January 31, 2020, and covered period starts on January 31, 2020, and
extends to the later of 120 days after enactment or 120 days after the national emergency declared by the President on extends to the later of 120 days after enactment or 120 days after the national emergency declared by the President on
March 13, 2020, terminates. For more information, see CFPB, March 13, 2020, terminates. For more information, see CFPB, ~~Statement~~Statem ent on Supervisory and ~~Enforcement~~Enforcem ent Practices
Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act , April 1, 2020, at , April 1, 2020, at
https://files.consumerfinance.gov/f/documents/cfpb_credithttps://files.consumerfinance.gov/f/documents/cfpb_credit -reporting-policy-statement_cares-act_2020-04.pdf. -reporting-policy-statement_cares-act_2020-04.pdf.
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The Consumer Data Industry and Specialty Services This section provides background information on the consumer data industry, which general y includes credit reporting agencies (CRAs), also referred to as credit bureaus (both terms are used interchangeably in this report). This section also provides background on credit scoring, a specialty service the industry provides, including a summary of the key factors known to affect specialty service the industry provides, including a summary of the key factors known to affect
credit scores. credit scores.
Consumer Reporting Services
According to the Fair Credit Reporting Act (FCRA), which According to the Fair Credit Reporting Act (FCRA), which ~~generally~~general y regulates the business of regulates the business of
credit reporting, CRAs are firms that prepare consumer reports based upon individuals’ financial credit reporting, CRAs are firms that prepare consumer reports based upon individuals’ financial
transactions history data.transactions history data.45 Such data may include historical information about credit repayment, Such data may include historical information about credit repayment,
tenant payment, employment, insurance claims, arrests, bankruptcies, and check writing and tenant payment, employment, insurance claims, arrests, bankruptcies, and check writing and
account management. Consumer files, however, do not contain information on consumer income account management. Consumer files, however, do not contain information on consumer income
or assets.or assets.56 Consumer reports Consumer reports ~~generally~~general y may not include information on items such as race or may not include information on items such as race or
ethnicity, religious or political preference, or medical history.ethnicity, religious or political preference, or medical history.67
Equifax, Experian, and TransUnion are the three largest nationwide providers of credit reports. Equifax, Experian, and TransUnion are the three largest nationwide providers of credit reports.78
Other CRAs provide a variety of specialized consumer reporting services.Other CRAs provide a variety of specialized consumer reporting services.89 Some specialty CRAs Some specialty CRAs
collect data regarding payment for phone, utilities (e.g., electric, gas, water), and collect data regarding payment for phone, utilities (e.g., electric, gas, water), and
telecommunication (e.g., cable) services.telecommunication (e.g., cable) services.910 Utility and telecommunication service providers use Utility and telecommunication service providers use
the reports to verify the identity of customers and determine downpayment requirements for new the reports to verify the identity of customers and determine downpayment requirements for new
customers. Property management companies and rent payment services may report to CRAs that customers. Property management companies and rent payment services may report to CRAs that
specialize in collecting rent payment data for tenant and employment screening.specialize in collecting rent payment data for tenant and employment screening.1011 Some CRAs Some CRAs
specialize in consumer reporting for the underbanked, near prime, and subprime consumer specialize in consumer reporting for the underbanked, near prime, and subprime consumer
segments, including consumers with minimal recorded data.segments, including consumers with minimal recorded data.1112 Some CRAs specialize in debt Some CRAs specialize in debt
collection (recovering past due funds) and fraud verification data.collection (recovering past due funds) and fraud verification data.12

~~4 P.L. 91-508. Title~~13 5 P.L. 91-508. T itle VI, §601, 84 Stat. 1128 (1970), codified as amended at 15 U.S.C. VI, §601, 84 Stat. 1128 (1970), codified as amended at 15 U.S.C. §§1681-1681x. For the legal §§1681-1681x. For the legal
definition, see 12 C.F.R. §1090.104, “Consumer Reporting Market,” at http://www.ecfr.gov/cgi-bin/text-idx?SID=definition, see 12 C.F.R. §1090.104, “Consumer Reporting Market,” at http://www.ecfr.gov/cgi-bin/text-idx?SID=
c13cb74ad55c0e8d6abf8d2d1b26a2bc&mc=true&node=se12.9.1090_1104&rgn=div8. c13cb74ad55c0e8d6abf8d2d1b26a2bc&mc=true&node=se12.9.1090_1104&rgn=div8. ~~The~~T he Fair Credit Reporting Act, Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, and the Equalthe Fair Debt Collection Practices Act, and the Equal Credit Opportunity ActCredit Opportunity Act are all consumer credit protection are all consumer credit protection
amendments includedamendments included in the Consumer Credit Protection Act (P.L. 90in the Consumer Credit Protection Act (P.L. 90 -321). -321).
~~5 See Bureau~~ 6 See Bureau of Consumer Financial Protection (CFPB), of Consumer Financial Protection (CFPB), Key Dimensions and Processes in the U.S. Credit Reporting
System , December 2012, at http://files.consumerfinance.gov/f/201212_cfpb_credit, December 2012, at http://files.consumerfinance.gov/f/201212_cfpb_credit -reporting-white-paper.pdf. -reporting-white-paper.pdf.
67 See See Federal Reserve BoardFederal Reserve Board (FRB), “(FRB), “ Federal Fair Lending Regulations andFederal Fair Lending Regulations and ~~Statutes~~ Statut es: Equal: Equal Credit Opportunity Credit Opportunity
(Regulation B),” (Regulation B),” ~~Consumer Compliance~~Consum er Com pliance Handbook, at http://www.federalreserve.gov/boarddocs/supmanual/cch/, at http://www.federalreserve.gov/boarddocs/supmanual/cch/
fair_lend_reg_b.pdf; and Experian, “fair_lend_reg_b.pdf; and Experian, “ Basic Questions About Credit Reports and Credit Reporting,” Basic Questions About Credit Reports and Credit Reporting,” Reports on Credit
issue 1, at https://www.experian.com/assets/consumer-education-content/brochures/Reports_Issue_1.pdf. , at https://www.experian.com/assets/consumer-education-content/brochures/Reports_Issue_1.pdf.
78 For a list of consumer reporting agencies, see “List of Consumer Reporting Agencies,” For a list of consumer reporting agencies, see “List of Consumer Reporting Agencies,” ~~issued by~~ issued by CFPB, at CFPB, at
https://files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-companies-list.pdf https://files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-companies-list.pdf
89 Some specialty CRAs Some specialty CRAs are subsidiariesare subsidiaries of larger CRAs.of larger CRAs. Examples includeExamples include the National Consumer the National Consumer ~~Telecom~~T elecom & Utilities & Utilities
Exchange, at http://www.nctue.com/, whichExchange, at http://www.nctue.com/, which is ownedis owned by Equifax; and RentBureau,by Equifax; and RentBureau, at http://www.experian.com/at http://www.experian.com/
rentbureau/renter-credit.html, which is ownedrentbureau/renter-credit.html, which is owned by Experian. by Experian.
910 For example, see National Consumer For example, see National Consumer ~~Telecom~~T elecom & Utilities Exchange, at http://www.nctue.com/. & Utilities Exchange, at http://www.nctue.com/.
1011 For example, see Experian RentBureau, at For example, see Experian RentBureau, at http://www.experian.com/rentbureau/renter-credit.html. http://www.experian.com/rentbureau/renter-credit.html.
1112 For example, see Clarity Services, For example, see Clarity Services, Inc., at https://www.clarityservices.com/about/, which focusesInc., at https://www.clarityservices.com/about/, which focuses on higher-risk on higher-risk
borrowers and collects data from financial service providers, such as auto financers, check cashers, prepaid card borrowers and collects data from financial service providers, such as auto financers, check cashers, prepaid card
issuers,issuers, peer-to-peer micro lenders, and small dollar credit lenders. peer-to-peer micro lenders, and small dollar credit lenders.
1213 See See Consumer Data Industry Association (CDIA), “About CDIA,” at https://www.cdiaonline.org/about/index.cfm?Consumer Data Industry Association (CDIA), “About CDIA,” at https://www.cdiaonline.org/about/index.cfm?
~~unItemNumber=515.~~
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Examples of Specialty CRA Services: Checking Accounts and Check Verification
When an individual applies for a checking account, a depository When an individual applies for a checking account, a depository ~~institution typically~~ institution typical y pays a fee to purchase a credit pays a fee to purchase a credit
report from a specialty CRA. This is a component of the initial fixed costs the depository institution incurs to report from a specialty CRA. This is a component of the initial fixed costs the depository institution incurs to
begin a financial relationship with a new customer.begin a financial relationship with a new customer. The institution can use the information about a prospective The institution can use the information about a prospective
customer to determinecustomer to determine whether to offer the consumer a checking account and, if so,whether to offer the consumer a checking account and, if so, what range of product what range of product
features (e.g., check-writing privileges,features (e.g., check-writing privileges, overdraft protection) to offer the consumer. overdraft protection) to offer the consumer.
~~Specifically,~~ Specifical y, depository institutions use credit reports to screendepository institutions use credit reports to screen for certain types of borrowerfor certain types of borrower risks.risks.13 14 Banks must Banks must
verify the identities of their customersverify the identities of their customers as requiredas required by the Bank Secrecy Act.by the Bank Secrecy Act.1415 In addition, depository institutions In addition, depository institutions
look for any incidents of fraudulent activity associated with a prospectivelook for any incidents of fraudulent activity associated with a prospective ~~customer.15 Depository institutions~~
~~typically reject consumers when they discover problems~~ customer.16 Depository institutions typical y reject consumers when they discover problems verifying identity or incidents of fraud. Next, depository verifying identity or incidents of fraud. Next, depository
institutions look for informationinstitutions look for information about past banking relationships,about past banking relationships, particularly to see if any financial institutions particularly to see if any financial institutions
closed checking or other accounts due to their inability to col ect overdraft or insufficient funds fees.closed checking or other accounts due to their inability to col ect overdraft or insufficient funds fees.16 17 Although Although
somesome institutions may choose to reject applicants if they discover adverseinstitutions may choose to reject applicants if they discover adverse information in their credit reports, information in their credit reports,
many institutions may offer these applicants specializedmany institutions may offer these applicants specialized checking accounts with lesschecking accounts with less overdraft coverage and fewer overdraft coverage and fewer
check-writing privileges.check-writing privileges. Institutions may also offer these applicants prepaid cards as a substitute for a checking Institutions may also offer these applicants prepaid cards as a substitute for a checking
account. The informationaccount. The information the institutions obtain from CRAs may also the institutions obtain from CRAs may also ~~allow~~al ow them to infer the probability of cross- them to infer the probability of cross-
~~selling~~ sel ing (or arguably preapproving access to) other financial products (e.g., mortgages,(or arguably preapproving access to) other financial products (e.g., mortgages, credit cards, savings credit cards, savings
accounts) to new customers. accounts) to new customers.
SomeSome specialty CRAs help facilitate consumer payments by check.specialty CRAs help facilitate consumer payments by check. For example,For example, if a customerif a customer wants to use a check wants to use a check
to pay for purchases, a merchant can to pay for purchases, a merchant can ~~electronically~~ electronical y and quickly request check authorization from a specialty CRA and quickly request check authorization from a specialty CRA
that provides informationthat provides information at the point of sale (at the cash register).at the point of sale (at the cash register).17 18 The specialty CRA col ects payment history The specialty CRA col ects payment history
and check-writing patterns, and the merchant pays a check authorization fee to obtain an instant recommendation and check-writing patterns, and the merchant pays a check authorization fee to obtain an instant recommendation
of accept or decline.of accept or decline.1819
Firms that use consumer reports may also report information to CRAs, thus serving as Firms that use consumer reports may also report information to CRAs, thus serving as furnishers. .
A A tradeline is an account attached to a particular consumer that is reported to a CRA by a is an account attached to a particular consumer that is reported to a CRA by a
furnisher.furnisher.1920 A tradeline serves as a record of the transaction (payment) activity associated with the A tradeline serves as a record of the transaction (payment) activity associated with the
account. Furnishing tradelines is voluntary, and furnishers are not required to submit tradelines to account. Furnishing tradelines is voluntary, and furnishers are not required to submit tradelines to
~~all CRAs. Furnishers also have different business models and policies, resulting in different~~

~~13 See~~ unItemNumber=515. 14 See ChexSystems, “ChexSystems—Credit System for Checking Accounts,” Crediful,ChexSystems, “ChexSystems—Credit System for Checking Accounts,” Crediful, at https://www.crediful.com/at https://www.crediful.com/
chexsystems/. chexsystems/.
1415 P.L. 91-508. P.L. 91-508.
1516 Fraud Fraud may include,may include, but is not limited to, identity theft and check kiting. Real but is not limited to, identity theft and check kiting. Real ~~Time~~T ime Identity Check is a specialty CRA Identity Check is a specialty CRA
usedused for this purpose; see Accessfor this purpose; see Access Payment Systems, “Payment Systems, “ Real Real ~~Time~~T ime Check Verification,” at Check Verification,” at
http://www.accesspaymentsystems.com/real-time-check-verification/. Another specialty CRA usedhttp://www.accesspaymentsystems.com/real-time-check-verification/. Another specialty CRA used for this purpose is for this purpose is
Early Warning, which offers a product known as Early Warning, which offers a product known as Deposit Chek, at https://www.earlywarning.com/solutions/payment/, at https://www.earlywarning.com/solutions/payment/
depositdeposit -chek.html#real-time-deposit-chek-service. In the payment system, fraud occurs when-chek.html#real-time-deposit-chek-service. In the payment system, fraud occurs when an unauthorized person an unauthorized person
accessesaccesses the value associated with a payment vehicle. See Mark Furletti and Stephen Smith, the value associated with a payment vehicle. See Mark Furletti and Stephen Smith, The Laws, Regulations,
and Industry Practices That Protect ~~Consumers Who~~ Consum ers Who Use Electronic ~~Payment Systems~~Paym ent System s: ACH E-Checks & Prepaid
Cards, Federal, Federal Reserve Bank of Philadelphia, Payment Cards Center DiscussionReserve Bank of Philadelphia, Payment Cards Center Discussion Paper, DP05Paper, DP05 -04, March 2005, at -04, March 2005, at
http://www.philadelphiafed.org/consumer-credit-and-payments/payment-cards-center/publications/discussion-papers/http://www.philadelphiafed.org/consumer-credit-and-payments/payment-cards-center/publications/discussion-papers/
2005/ConsumerProtection.pdf. 2005/ConsumerProtection.pdf.
1617 For ChexSystems, which is For ChexSystems, which is ~~owned~~ owned by parent company Fidelity National Information Services (FNIS), this product is by parent company Fidelity National Information Services (FNIS), this product is
known asknown as QualiFile.QualiFile. ~~See Rebecca Lake, “~~ See Rebecca Lake, “ What Is a GoodWhat Is a Good ChexSystems (Qualifile) Score?” My ChexSystems (Qualifile) Score?” My ~~BankTracker~~BankT racker, July 20, , July 20,
2018, at https://www.mybanktracker.com/checking/faq/good-chexsystems-qualifile-score-276348. For Early Warning, 2018, at https://www.mybanktracker.com/checking/faq/good-chexsystems-qualifile-score-276348. For Early Warning,
this product isthis product is known as known as Deposit Chek at https://www.earlywarning.com/solutions/payment/deposit at https://www.earlywarning.com/solutions/payment/deposit -chek.html#real--chek.html#real-
time-deposittime-deposit -chek-service. -chek-service.
1718 Certegy, which is Certegy, which is owned byowned by parent company FIS (see http://www.fisglobal.com/products-retailpayments), and parent company FIS (see http://www.fisglobal.com/products-retailpayments), and
~~Telecheck~~T elecheck (see http://www.firstdata.com/telecheck/) are specialty CRAs often used to obtain check authorization at the (see http://www.firstdata.com/telecheck/) are specialty CRAs often used to obtain check authorization at the
point of sale (i.e., the moment customers pay for their purchases). point of sale (i.e., the moment customers pay for their purchases).
~~18 The~~19 T he fee paid by the merchant is analogous to the merchant discount fee that merchants pay when accepting credit or fee paid by the merchant is analogous to the merchant discount fee that merchants pay when accepting credit or
debit card payments. See CRSdebit card payments. See CRS Report R41913, Report R41913, Regulation of Debit Interchange Fees, by Darryl E. Getter. , by Darryl E. Getter.
1920 See See Experian, “Glossary of Credit Experian, “Glossary of Credit ~~Terms~~T erms,” at http://www.experian.com/credit-education/glossary.html. ,” at http://www.experian.com/credit-education/glossary.html.
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al CRAs. Furnishers also have different business models and policies, resulting in different reporting practices. Some furnishers may report reporting practices. Some furnishers may report ~~all~~ al unpaid customer obligations that were deemed unpaid customer obligations that were deemed
uncollectible and written off their balance sheets; some report when money balances owed uncollectible and written off their balance sheets; some report when money balances owed
surpass minimum threshold levels; some report only the principal balances owed minus the surpass minimum threshold levels; some report only the principal balances owed minus the
penalties and fees; and others may report penalties and fees; and others may report ~~all~~ al monies owed. Furnishers also have discretion over monies owed. Furnishers also have discretion over
the types of obligations they wish to report.the types of obligations they wish to report.2021
Benefits to users of consumer data increase as more individual companies choose to participate as Benefits to users of consumer data increase as more individual companies choose to participate as
furnishers, but furnishers do incur costs to report data. To become furnishers, firms must be furnishers, but furnishers do incur costs to report data. To become furnishers, firms must be
approved and comply with the policies of a CRA, such as fee registration requirements.approved and comply with the policies of a CRA, such as fee registration requirements.2122 The The
transfer of consumer data involves security risks, and many CRAs have adopted standardized transfer of consumer data involves security risks, and many CRAs have adopted standardized
reporting formats and requirements approved by the Consumer Data Industry Association (CDIA) reporting formats and requirements approved by the Consumer Data Industry Association (CDIA)
for transferring data.for transferring data.2223 Furnishers must be able to comply with industry data transfer requirements Furnishers must be able to comply with industry data transfer requirements
or some CRAs are unlikely to accept their data. Compliance may require investing in technology or some CRAs are unlikely to accept their data. Compliance may require investing in technology
compatible with the computer systems of a CRA. Compliance costs may be more burdensome for compatible with the computer systems of a CRA. Compliance costs may be more burdensome for
~~smaller~~ smal er firms, causing some to choose not to be furnishers. In addition, entities that elect to firms, causing some to choose not to be furnishers. In addition, entities that elect to
become furnishers face legal obligations under the FCRA.become furnishers face legal obligations under the FCRA.2324 The FCRA requires furnishers to The FCRA requires furnishers to
report accurate and complete information as report accurate and complete information as ~~well~~ wel as to investigate consumer disputes. Hence, as to investigate consumer disputes. Hence,
reporting obligations could possibly, under some circumstances, result in legal costs, which may reporting obligations could possibly, under some circumstances, result in legal costs, which may
also influence a firm’s decision to become a furnisher. also influence a firm’s decision to become a furnisher.
Business models and policies of CRAs are also different. Different CRAs may collect the same Business models and policies of CRAs are also different. Different CRAs may collect the same
information on the same individuals but adopt different conventions for storing the information. information on the same individuals but adopt different conventions for storing the information.
One CRA may report a delinquent debt obligationOne CRA may report a delinquent debt obligation separately from the penalties and fees whereas separately from the penalties and fees whereas
another CRA may choose to combine both items into one entry. Consequently, consumer reports another CRA may choose to combine both items into one entry. Consequently, consumer reports
obtained from different CRAs on the same consumer are likely to differ due to different policies obtained from different CRAs on the same consumer are likely to differ due to different policies
adopted by furnishers, CRAs, or both. adopted by furnishers, CRAs, or both.
Credit Scoring Services
A consumer score is a (numeric) metric that can be used to predict a variety of financial A consumer score is a (numeric) metric that can be used to predict a variety of financial
behaviors.behaviors.2425 Consumer credit scores are prepared for lenders to determine, for example, the Consumer credit scores are prepared for lenders to determine, for example, the
likelihoodlikelihood of loan default. Other consumer scores can be prepared to predict the likelihood of of loan default. Other consumer scores can be prepared to predict the likelihood of
filing an insurance claim, overdrawing a bank account, failing to pay a utility filing an insurance claim, overdrawing a bank account, failing to pay a utility ~~bill~~bil , committing , committing
fraud, or a host of other adverse financial behaviors. Consumer scores are fraud, or a host of other adverse financial behaviors. Consumer scores are ~~typically~~typical y computed computed
using the information obtained from one or more consumer reports. Rather than maintaining a using the information obtained from one or more consumer reports. Rather than maintaining a
~~repository of credit records, some firms are primarily engaged in the production of consumer~~

20 21 A community bank, for example, may choose to report delinquencies on consumer loans rather than on commercial A community bank, for example, may choose to report delinquencies on consumer loans rather than on commercial
loans given that it may have greater information regarding the cash flow loans given that it may have greater information regarding the cash flow ~~circumstances~~circumstance s of its larger commercial of its larger commercial
borrowers. Seeborrowers. See ~~Federal Trade~~ Federal T rade Commission ( Commission (~~FTC~~FT C) and FRB, ) and FRB, Report to Congress on the Fair Credit Reporting Act
Dispute Process, August, August 2006, at http://www.federalreserve.gov/boarddocs/rptcongress/fcradispute/2006, at http://www.federalreserve.gov/boarddocs/rptcongress/fcradispute/
fcradispute200608.htm#toc4. fcradispute200608.htm#toc4.
2122 For examples of some furnisher requirements, see Experian, “Reporting to Credit Agencies,” at For examples of some furnisher requirements, see Experian, “Reporting to Credit Agencies,” at
http://www.experian.com/consumer-information/reporting-to-credithttp://www.experian.com/consumer-information/reporting-to-credit -agencies.html. -agencies.html.
~~22 The~~23 T he approved formats add security (privacy) protections to the data transfer process. See CDIA, “Metro 2 Format for approved formats add security (privacy) protections to the data transfer process. See CDIA, “Metro 2 Format for
Credit Reporting,” at https://www.cdiaonline.org/resources/furnishers-of-data-overview/metro2-information/. Credit Reporting,” at https://www.cdiaonline.org/resources/furnishers-of-data-overview/metro2-information/.
~~23 See FTC~~24 See FT C, “Consumer Reports: What Information Furnishers Need to Know,” at https://www.ftc.gov/tips-advice/, “Consumer Reports: What Information Furnishers Need to Know,” at https://www.ftc.gov/tips-advice/
business-center/guidance/consumer-reports-whatbusiness-center/guidance/consumer-reports-what -information-furnishers-need-know. -information-furnishers-need-know.
~~24 The~~25 T he predictability power of consumer scores, assuming predictability power of consumer scores, assuming no significant changes in consumer repayment patterns, may no significant changes in consumer repayment patterns, may
last for approximately one year to two years. For examples of various types of scores and corresponding estimated last for approximately one year to two years. For examples of various types of scores and corresponding estimated
months of predictive power, see months of predictive power, see ~~TransUnion, “~~T ransUnion, “ Scores Overview,” Scores Overview,” TransUnion Scores, at http://www.transunion.com/, at http://www.transunion.com/
docs/financialServices/FS_ScoresOverview.pdf. docs/financialServices/FS_ScoresOverview.pdf.
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~~scores.25~~ repository of credit records, some firms are primarily engaged in the production of consumer scores.26 Hence, consumer scoring can be considered a specialty service in the consumer data Hence, consumer scoring can be considered a specialty service in the consumer data
industry. For example, if a user of a consumer report subsequently wants a consumer score, it industry. For example, if a user of a consumer report subsequently wants a consumer score, it
may be charged an additional fee. may be charged an additional fee.
Given the variety of different financial behaviors to predict, there are many consumer scores that Given the variety of different financial behaviors to predict, there are many consumer scores that
can be calculated. Consumer scores for the same individual and behavior calculated by different can be calculated. Consumer scores for the same individual and behavior calculated by different
scoring firms are also likely to differ. Consumer scoring firms may have purchased consumer scoring firms are also likely to differ. Consumer scoring firms may have purchased consumer
information from different CRAs, which have their own policies for storing and reporting information from different CRAs, which have their own policies for storing and reporting
information. Each scoring firm has its own proprietary statistical model(s), meaning that each information. Each scoring firm has its own proprietary statistical model(s), meaning that each
firm decides what consumer information should be included and excluded from calculations. firm decides what consumer information should be included and excluded from calculations.
Each firm can choose its own weighting algorithms. For example, included information can be Each firm can choose its own weighting algorithms. For example, included information can be
~~equally~~equal y weighted, or heavier weights can be placed on more recent information or on information weighted, or heavier weights can be placed on more recent information or on information
otherwise deemed more pertinent. Sometimes the consumer scoring firm selects the appropriate otherwise deemed more pertinent. Sometimes the consumer scoring firm selects the appropriate
weighting scheme, and sometimes the requestor of a consumer score may provide instructions to weighting scheme, and sometimes the requestor of a consumer score may provide instructions to
the preparer. Hence, consumers may not see the actual scores used until the preparer. Hence, consumers may not see the actual scores used until after the decisionmaking the decisionmaking
firms release them, particularly in cases when customized scores were requested and used in the firms release them, particularly in cases when customized scores were requested and used in the
decisionmaking process. decisionmaking process.

25 26 FICO (see http://www.fico.com/en/) and VantageScore FICO (see http://www.fico.com/en/) and VantageScore (see http://www.vantagescore.com/) are examples of firms (see http://www.vantagescore.com/) are examples of firms
that specialize in the production of credit scores; their primary businessthat specialize in the production of credit scores; their primary business is not to compile consumer reports. is not to compile consumer reports.
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Some Factors Frequently Used to Calculate Credit ~~Scores26~~Scores27
Lenders, Lenders, whether for mortgages or other forms of consumerwhether for mortgages or other forms of consumer loans (e.g.,loans (e.g., credit card loans, credit card loans, ~~installment~~instal ment loans, and loans, and
automobile loans), rely upon credit scores,automobile loans), rely upon credit scores, which are calculated to representwhich are calculated to represent the riskthe risk of delinquency or default of of delinquency or default of
consumersconsumers seeking credit.seeking credit. To calculate a credit score,To calculate a credit score, credit scoring modelscredit scoring models ~~generally~~ general y obtain the fol owing factors obtain the fol owing factors
from a credit report. from a credit report.
 
Payment history. A lender is concerned about the borrower. A lender is concerned about the borrower paying past credit accounts on time. The paying past credit accounts on time. The
payment history includes informationpayment history includes information related to late or missedrelated to late or missed payments, how late, how much was owed, payments, how late, how much was owed,
bankruptcies, foreclosures,bankruptcies, foreclosures, lawsuits, and wage garnishments. Negative information on a credit report lawsuits, and wage garnishments. Negative information on a credit report
negatively affects a credit score. negatively affects a credit score.
 
Credit utilization.. This factor provides informationThis factor provides information regarding the amount of outstanding debt a consumer regarding the amount of outstanding debt a consumer
has accumulated relative to his or her credit limit.has accumulated relative to his or her credit limit. An individual with $3,000 in charges on a credit card with An individual with $3,000 in charges on a credit card with
a $5,000 limita $5,000 limit would have a credit utilization rate of 60%. A high credit utilization rate negatively affects a would have a credit utilization rate of 60%. A high credit utilization rate negatively affects a
credit score.credit score.
 
Length of credit history. The more. The more ~~experience~~ experience an individual has using credit,an individual has using credit, the easierthe easier it is for a lenderit is for a lender to to
determinedetermine ~~how well~~ how wel or poorly additional credit wilor poorly additional credit wil be managed. Calculating credit scoresbe managed. Calculating credit scores may be impossible may be impossible
for “invisible” consumersfor “invisible” consumers (i.e.,(i.e., consumers with either no credit history or an insufficient credit history). consumers with either no credit history or an insufficient credit history).
 
New credit accounts or requests.. There are two types of inquiries.There are two types of inquiries. A A soft inquiry occurs when inquiry occurs when
consumersconsumers request to check their credit reports,request to check their credit reports, ~~typically~~ typical y for accuracies or to dispute information, for accuracies or to dispute information, but there but there
is no corresponding request for credit. Usersis no corresponding request for credit. Users of credit reports do not receiveof credit reports do not receive information regarding soft information regarding soft
inquiries.inquiries. A A hard inquiry occurs when consumers inquiry occurs when consumers apply for credit, and action is required by users of credit apply for credit, and action is required by users of credit
reports,reports, ~~typically~~ typical y to make to make approval or rejection decisions.approval or rejection decisions. Hence,Hence, making numerous different credit requests, making numerous different credit requests,
particularly over a short period of time,particularly over a short period of time, ~~generally~~ general y can negatively affect a score. If a consumer shops for credit, can negatively affect a score. If a consumer shops for credit,
which would be indicated by applying for the same type of credit within a short period of time (e.g., two to which would be indicated by applying for the same type of credit within a short period of time (e.g., two to
six weeks), then that activity would count only as one hard inquiry in most credit scores.six weeks), then that activity would count only as one hard inquiry in most credit scores.27 28 Prescreening, Prescreening,
which is used frequently in credit card solicitations,which is used frequently in credit card solicitations, does not count as a “firm offer of credit or insurance” does not count as a “firm offer of credit or insurance”
and, therefore,and, therefore, does not affect consumer credit scores.does not affect consumer credit scores.2829
 
Credit mix. Demonstrating Demonstrating the ability to manage multiple types of credit obligations (i.e.,the ability to manage multiple types of credit obligations (i.e., revolving, revolving,
~~installment,~~ instal ment, mortgage credit, and finance company credit) influences a credit score.mortgage credit, and finance company credit) influences a credit score. For example,For example, the ability to the ability to
maintain a stable debt-to-income ratio, preferably below 28%, despite having a mix of credit types, indicates maintain a stable debt-to-income ratio, preferably below 28%, despite having a mix of credit types, indicates
the ability to manage credit. Having most of one’s credit consist of credit fromthe ability to manage credit. Having most of one’s credit consist of credit from indirect lenders, such as such as
department storesdepartment stores and rent-to-own stores,and rent-to-own stores, may not be viewed as favorably in somemay not be viewed as favorably in some credit scoring modelscredit scoring models as as
credit from credit from direct lenders, such as banks and credit unions. , such as banks and credit unions.
The firm that prepares or user that purchases a credit score The firm that prepares or user that purchases a credit score can decide how much weight to apply to each factor, can decide how much weight to apply to each factor,
and they may include additional predictive factors (e.g., information found on the credit application such as income and they may include additional predictive factors (e.g., information found on the credit application such as income
and employmentand employment history) in the calculations. The Equal Credit Opportunity Act, however,history) in the calculations. The Equal Credit Opportunity Act, however, prohibits characteristics prohibits characteristics
such as race, sex, maritalsuch as race, sex, marital status, national origin, and religionstatus, national origin, and religion ~~from~~ from being used in credit scoring models.being used in credit scoring models.2930
Information for consumersInformation for consumers on how to improveon how to improve and maintain a good credit scoreand maintain a good credit score is available fromis available from the Consumer the Consumer
Financial Protection Bureau (see https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/). Financial Protection Bureau (see https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/).
Existing Consumer Protections and Regulation
of CRAs
This section provides a brief overview of existing consumer protections and regulation related to This section provides a brief overview of existing consumer protections and regulation related to
credit reporting. credit reporting.

~~26 See~~ 27 See Fair Isaac, “What’s In My FICO Scores:Fair Isaac, “What’s In My FICO Scores: ~~How~~ How My FICO ScoresMy FICO Scores Are Calculated,”Are Calculated,” at http://www.myfico.com/at http://www.myfico.com/
crediteducation/whatsinyourscore.aspx; and FRB,crediteducation/whatsinyourscore.aspx; and FRB, “ “Credit Reports and Credit Score,” at Credit Reports and Credit Score,” at
https://www.federalreserveconsumerhelp.gov/learnmore/credithttps://www.federalreserveconsumerhelp.gov/learnmore/credit -reports-and-scores?sc_lang=en. -reports-and-scores?sc_lang=en.
2728 CFPB, CFPB, What effect will shopping for an auto loan have on my credit? Ask CFPB, June? Ask CFPB, June 6, 2016, at 6, 2016, at
https://www.consumerfinance.gov/ask-cfpb/whathttps://www.consumerfinance.gov/ask-cfpb/what -effect-effect -will-shopping-for-an-auto-loan-have-on-my-credit-en-763/. -will-shopping-for-an-auto-loan-have-on-my-credit-en-763/.
2829 See See FRB,FRB, “Permissible Purposes of Consumer Reports (FRCA, Section 604) and Investigative Consumer Reports “Permissible Purposes of Consumer Reports (FRCA, Section 604) and Investigative Consumer Reports
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As noted, the Fair Credit Reporting Act (FCRA), enacted in 1970, is the main statute regulating As noted, the Fair Credit Reporting Act (FCRA), enacted in 1970, is the main statute regulating
the credit reporting industry. The FCRA requires “that consumer reporting agencies adopt the credit reporting industry. The FCRA requires “that consumer reporting agencies adopt
reasonable procedures for meeting the needs of commerce for consumer credit, personnel, reasonable procedures for meeting the needs of commerce for consumer credit, personnel,
insurance, and other information in a manner which is fair and equitable to the consumer, with insurance, and other information in a manner which is fair and equitable to the consumer, with
regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.”regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.”3031
The FCRA establishes consumers’ rights in relation to their credit reports, as The FCRA establishes consumers’ rights in relation to their credit reports, as ~~well~~ wel as permissible as permissible
uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and
use the information contained in consumers’ credit reports.use the information contained in consumers’ credit reports.31
32 The FCRA includes consumer protection provisions. Under the FCRA, consumers must be told The FCRA includes consumer protection provisions. Under the FCRA, consumers must be told
when their information from a CRA has been used after an adverse action (when their information from a CRA has been used after an adverse action (~~generally~~general y a denial of a denial of
credit) has occurred, and disclosure of that information must be made free of charge.credit) has occurred, and disclosure of that information must be made free of charge.3233 Consumers Consumers
have a right to one free credit report every year (from each of the three largest nationwide credit have a right to one free credit report every year (from each of the three largest nationwide credit
reporting providers) even in the absence of an adverse action (e.g., credit denial). Consumers also reporting providers) even in the absence of an adverse action (e.g., credit denial). Consumers also
have the right to dispute inaccurate or incomplete information in their report. After a consumer have the right to dispute inaccurate or incomplete information in their report. After a consumer
alerts a CRA of such a discrepancy, the CRA must investigate and correct errors, alerts a CRA of such a discrepancy, the CRA must investigate and correct errors, ~~usually~~usual y within within
30 days. The FCRA also limits the length of time negative information may remain on reports. 30 days. The FCRA also limits the length of time negative information may remain on reports.
Negative collection tradelines Negative collection tradelines ~~typically~~typical y stay on credit reports for 7 years, even if the consumer stay on credit reports for 7 years, even if the consumer
pays in full the item in collection; a tradeline associated with a personal bankruptcy stays on a pays in full the item in collection; a tradeline associated with a personal bankruptcy stays on a
credit report for 10 years.credit report for 10 years.3334
The Dodd-Frank The Dodd-Frank ~~Wall~~ Wal Street Reform and Consumer Protection Act (Dodd-Frank)Street Reform and Consumer Protection Act (Dodd-Frank)3435 established established
the Bureau of Consumer Financial Protection (CFPB), consolidating many federal consumer the Bureau of Consumer Financial Protection (CFPB), consolidating many federal consumer
financial protection powers from other federal agencies. The CFPB has rulemaking and financial protection powers from other federal agencies. The CFPB has rulemaking and
enforcement authorities over enforcement authorities over ~~all~~ al CRAs for certain consumer protection laws; it has supervisory CRAs for certain consumer protection laws; it has supervisory
authority, or the authority to conduct examinations, over the larger CRAs. In July 2012, the CFPB authority, or the authority to conduct examinations, over the larger CRAs. In July 2012, the CFPB
announced that it would supervise CRAs with $7 announced that it would supervise CRAs with $7 ~~million~~ mil ion or more in annual receipts, which or more in annual receipts, which
included 30 firms representing approximately 94% of the market.included 30 firms representing approximately 94% of the market.35
36 The CFPB conducts examinations of the CRAs, reviewing procedures and operating systems The CFPB conducts examinations of the CRAs, reviewing procedures and operating systems
regarding the management of consumer data and enforcing applicable laws. In 2017, the CFPB regarding the management of consumer data and enforcing applicable laws. In 2017, the CFPB
released a report of its supervisory work in the credit reporting system.released a report of its supervisory work in the credit reporting system.3637 The report discusses the The report discusses the
CFPB’s efforts to work with credit bureaus and financial firms to improve credit reporting in CFPB’s efforts to work with credit bureaus and financial firms to improve credit reporting in

~~(FRCA,~~ (FRCA, Section 606),” Fair Credit Reporting, at http://www.federalreserve.gov/boarddocs/supmanual/cch/200611/Section 606),” Fair Credit Reporting, at http://www.federalreserve.gov/boarddocs/supmanual/cch/200611/
fcra.pdf; CFPB, fcra.pdf; CFPB, Key ~~Dimensions~~ Dim ensions and Processes in the U.S. Credit Reporting System , December 2012, p. 9, at , December 2012, p. 9, at
http://files.consumerfinance.gov/f/201212_cfpb_credithttp://files.consumerfinance.gov/f/201212_cfpb_credit -reporting-white-paper.pdf; and “-reporting-white-paper.pdf; and “ New RulesNew Rules for Prescreening,” for Prescreening,”
at https://www.bankersonline.com/articles/103643. at https://www.bankersonline.com/articles/103643.
2930 P.L. 93-495, P.L. 93-495, ~~Title~~T itle 5, 88 Stat. 1520; 15 U.S.C. §1691 et seq. 5, 88 Stat. 1520; 15 U.S.C. §1691 et seq.
3031 15 U.S.C. 15 U.S.C. §1681. §1681.
3132 CRS CRS Insight IN10792, Insight IN10792, The Equifax Data Breach: An Overview and Issues for Congress, by N. Eric Weiss. , by N. Eric Weiss.
~~32 See FTC~~33 See FT C, , A Summary of your Rights Under the Fair Credit Reporting Act, at https://www.consumer.ftc.gov/articles/, at https://www.consumer.ftc.gov/articles/
pdf-0096-fair-creditpdf-0096-fair-credit -reporting-act.pdf. -reporting-act.pdf.
3334 CFPB, CFPB, How long does negative information remain on my credit report? Ask CFPB, Ask CFPB, ~~August~~ August 4, 2016, at 4, 2016, at
https://www.consumerfinance.gov/ask-cfpb/how-long-does-negative-information-remain-on-my-credit-report-en-323/. https://www.consumerfinance.gov/ask-cfpb/how-long-does-negative-information-remain-on-my-credit-report-en-323/.
3435 P.L. 111-203, §1011. P.L. 111-203, §1011.
3536 CFPB, “CFPB to Supervise CFPB, “CFPB to Supervise Credit Reporting,” July 16, 2012, at http://www.consumerfinance.gov/newsroom/Credit Reporting,” July 16, 2012, at http://www.consumerfinance.gov/newsroom/
consumer-financial-protection-bureau-to-superivse-creditconsumer-financial-protection-bureau-to-superivse-credit -reporting/. -reporting/.
3637 CFPB, CFPB, Supervisory Highlights Consumer Reporting Special Edition , Issue 14, 2017, at , Issue 14, 2017, at
https://files.consumerfinance.gov/f/documents/201703_cfpb_Supervisory-Highlights-Consumer-Reporting-Special-https://files.consumerfinance.gov/f/documents/201703_cfpb_Supervisory-Highlights-Consumer-Reporting-Special-
Edition.pdf. Edition.pdf.
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three specific areas: data accuracy, dispute handling and resolution, and furnisher reporting. As three specific areas: data accuracy, dispute handling and resolution, and furnisher reporting. As
the report describes, credit bureaus and financial firms have developed data governance and the report describes, credit bureaus and financial firms have developed data governance and
quality control programs to monitor data accuracy through working with the CFPB. In addition, quality control programs to monitor data accuracy through working with the CFPB. In addition,
the CFPB has encouraged credit bureaus to improve their dispute and resolution processes, the CFPB has encouraged credit bureaus to improve their dispute and resolution processes,
including making it easier and more informative for consumers.including making it easier and more informative for consumers.3738
Recently, Congress has also been interested in improving consumer protections in the credit Recently, Congress has also been interested in improving consumer protections in the credit
reporting system, particularly in response to the 2017 Equifax data breach, which exposed reporting system, particularly in response to the 2017 Equifax data breach, which exposed
personal information of personal information of ~~millions~~ mil ions of consumers.of consumers.3839 The 2018 Economic Growth, Regulatory Relief, The 2018 Economic Growth, Regulatory Relief,
and Consumer Protection Act (P.L. 115-174) established new consumer protections relating to and Consumer Protection Act (P.L. 115-174) established new consumer protections relating to
credit reporting, including the right to a free credit freeze. Credit freezes credit reporting, including the right to a free credit freeze. Credit freezes ~~allow~~al ow consumers to stop consumers to stop
new credit from being opened in their name, to protect themselves from fraud and identity theft. new credit from being opened in their name, to protect themselves from fraud and identity theft.
Policy Issues
This section examines selected policy issues pertaining to the use of credit reports and scores in This section examines selected policy issues pertaining to the use of credit reports and scores in
consumer lending decisions. For each policy issue, the report highlights recent legislative and consumer lending decisions. For each policy issue, the report highlights recent legislative and
regulatory developments and discusses selected legislative proposals from the 116th Congress that regulatory developments and discusses selected legislative proposals from the 116th Congress that
would address the issue. would address the issue.
Inaccurate or Disputed Information
The accuracy of consumer information in consumer data reports has been an ongoing policy The accuracy of consumer information in consumer data reports has been an ongoing policy
concern. Inaccurate information in a credit report may limit a consumer’s access to credit in some concern. Inaccurate information in a credit report may limit a consumer’s access to credit in some
cases or increase the costs to the consumer of obtaining credit in others. In 2012, the Federal cases or increase the costs to the consumer of obtaining credit in others. In 2012, the Federal
Trade Commission (FTC) reported that 26% of participants in a survey of credit report accuracy Trade Commission (FTC) reported that 26% of participants in a survey of credit report accuracy
were able to identify at least one were able to identify at least one ~~potentially~~potential y material error on at least one of approximately three material error on at least one of approximately three
different credit reports prepared using their consumer information.different credit reports prepared using their consumer information.3940 After the reports were After the reports were
corrected, 13% of participants in the FTC study saw one or more of their credit scores increase. corrected, 13% of participants in the FTC study saw one or more of their credit scores increase.
For those who saw an increase, over 40% of their scores rose by more than 20 points, which For those who saw an increase, over 40% of their scores rose by more than 20 points, which
could increase the likelihoodcould increase the likelihood that the consumer would be offered less expensive credit terms. that the consumer would be offered less expensive credit terms.
Credit reporting inaccuracies may occur for various reasons. Consumers may inadvertently Credit reporting inaccuracies may occur for various reasons. Consumers may inadvertently
provide inaccurate data when applying for financial services. Furnishers may inadvertently input provide inaccurate data when applying for financial services. Furnishers may inadvertently input
inaccurate information into their databases. Matching information to the proper individual poses inaccurate information into their databases. Matching information to the proper individual poses
~~challenges~~ chal enges, such as in cases when multiple individuals have similar names and , such as in cases when multiple individuals have similar names and ~~spellings~~spel ings. In some . In some
cases, the information may be properly matched, but the individual could be a victim of fraud or cases, the information may be properly matched, but the individual could be a victim of fraud or
identity theft. identity theft.

~~37 The~~ 38 T he credit bureaus’ credit bureaus’ efforts to make disputes easier and more informative for consumers include (1) online portals to efforts to make disputes easier and more informative for consumers include (1) online portals to
submit disputessubmit disputes and uploadand upload attachments of supporting documentation; (2) improvements to their call center scripts and attachments of supporting documentation; (2) improvements to their call center scripts and
training regardingtraining regarding solicitation of relevant information from consumers with disputes; (3) no longer requiringsolicitation of relevant information from consumers with disputes; (3) no longer requiring that that
consumers obtain or purchase a recent consumer report before investigations; and (4) notice to consumer of dispute consumers obtain or purchase a recent consumer report before investigations; and (4) notice to consumer of dispute
results, includingresults, including investigation results. CFPB, investigation results. CFPB, Supervisory Highlights ~~Consumer~~Consum er Reporting Special Edition , Issue, Issue 14, 14,
2017, pp.9-11, at https://files.consumerfinance.gov/f/documents/201703_cfpb_Supervisory-Highlights-Consumer-2017, pp.9-11, at https://files.consumerfinance.gov/f/documents/201703_cfpb_Supervisory-Highlights-Consumer-
Reporting-Special-Edition.pdf. Reporting-Special-Edition.pdf.
3839 Equifax, “ Equifax, “ Equifax Announces Cybersecurity Incident Involving Consumer Information,” press release, September 7, Equifax Announces Cybersecurity Incident Involving Consumer Information,” press release, September 7,
2017, at https://investor.equifax.com/news-and-events/news/2017/09-07-2017-213000628. 2017, at https://investor.equifax.com/news-and-events/news/2017/09-07-2017-213000628.
~~39 See FTC~~40 See FT C, , Report to Congress Under Section 319 of the Fair and Accurate Credit Transactions Act of 2003 , ,
December 2012, at https://www.ftc.gov/sites/default/files/documents/reports/section-319-fair-and-accurate-credit-December 2012, at https://www.ftc.gov/sites/default/files/documents/reports/section-319-fair-and-accurate-credit-
transactions-act-2003-fifth-interim-federal-trade-commission/130211factareport.pdf. transactions-act-2003-fifth-interim-federal-trade-commission/130211factareport.pdf.
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The predictive power of consumer data, or the ability to accurately predict a consumer’s The predictive power of consumer data, or the ability to accurately predict a consumer’s
likelihoodlikelihood to default on a loan, would be enhanced to the extent that consumer tradelines are to default on a loan, would be enhanced to the extent that consumer tradelines are
regularly updated with correct and current information. As mentioned in the previous section, the regularly updated with correct and current information. As mentioned in the previous section, the
CFPB has recently encouraged credit bureaus and financial firms to improve data accuracy in CFPB has recently encouraged credit bureaus and financial firms to improve data accuracy in
credit reporting. For example, since 2014, the CFPB has required the largest consumer reporting credit reporting. For example, since 2014, the CFPB has required the largest consumer reporting
firms to provide standardized accuracy reports on a regular basis.firms to provide standardized accuracy reports on a regular basis.4041 The accuracy reports must The accuracy reports must
specify the frequency that consumers dispute information, list furnishers and industries with the specify the frequency that consumers dispute information, list furnishers and industries with the
most disputes, and provide dispute resolution information. According to the CFPB, the top 100 most disputes, and provide dispute resolution information. According to the CFPB, the top 100
furnishers provide 76% of tradeline information to the largest nationwide CRAs, and the furnishers provide 76% of tradeline information to the largest nationwide CRAs, and the
furnishers regularly update the account status of reported tradelines.furnishers regularly update the account status of reported tradelines.4142 In addition, the larger In addition, the larger
CRAs have also made improvements to the communication tool they use to facilitate the dispute CRAs have also made improvements to the communication tool they use to facilitate the dispute
resolution process between consumers and furnishers.resolution process between consumers and furnishers.4243 Further, effective July 1, 2017, the CRAs Further, effective July 1, 2017, the CRAs
enhanced public record data standards for the collection and timely updating of civil judgements enhanced public record data standards for the collection and timely updating of civil judgements
and tax liens.and tax liens.4344 Public record data must contain minimum identifying information (i.e., name, Public record data must contain minimum identifying information (i.e., name,
address, and Social Security number or date of birth) and must be updated at least every 90 days; address, and Social Security number or date of birth) and must be updated at least every 90 days;
otherwise, the tax lien and civil judgment information otherwise, the tax lien and civil judgment information ~~will~~ wil no longer be reported. The accuracy of no longer be reported. The accuracy of
credit reports, nonetheless, ultimately depends upon consumers to monitor and dispute any credit reports, nonetheless, ultimately depends upon consumers to monitor and dispute any
discrepancies. discrepancies.
H.R. 3621 H.R. 3621 and H.R. 5332 would address some concerns relating to inaccurate or disputed data by would address some concerns relating to inaccurate or disputed data by establishing establishing
new consumer rights around the dispute process. new consumer rights around the dispute process. ~~The bill~~Both bil s would guarantee consumers more would guarantee consumers more
information about dispute investigations and would grant consumers the right to appeal disputes information about dispute investigations and would grant consumers the right to appeal disputes
to credit bureaus, thus formalizing the process.to credit bureaus, thus formalizing the process.4445 It also would explicitly establish consumers’ It also would explicitly establish consumers’
right to seek injunctive relief, a legal remedy where a court requires future behavior change (e.g., right to seek injunctive relief, a legal remedy where a court requires future behavior change (e.g.,
removing adverse information from a credit record).removing adverse information from a credit record).4546 Moreover, it would provide Moreover, it would provide credit credit
restoration to consumers who are the victims of some predatory activities, such as deceptive restoration to consumers who are the victims of some predatory activities, such as deceptive
~~lender acts or fraud.46~~
~~Length of Time to Retain Negative Information~~
~~Policymakers have also considered the appropriate length of time negative information should be~~
~~allowed to remain on a credit report. Negative information generally refers to delinquencies or~~
~~defaults, which typically remain on credit reports for seven years. Negative information in a~~
~~credit report often results in a consumer appearing to pose a greater risk of default or other~~
~~negative behavior. This may lead a consumer to either pay more for financial services or, in some~~

~~40 See~~ lender acts or fraud.47 H.R. 5332 would require social security number matches before information could be included in a consumer’s credit report.48 It would also create a CFPB credit reporting ombudsperson to help resolve persistent errors.49 41 See CFPB, “Prepared Remarks of CFPB Director Richard Cordray at the Medical Debt Collection Hearing,” CFPB, “Prepared Remarks of CFPB Director Richard Cordray at the Medical Debt Collection Hearing,”
December 11, 2014, at http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-director-richard-December 11, 2014, at http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-director-richard-
cordray-at-the-medical-debt-collection-hearing/. A sample accuracy report may be found at cordray-at-the-medical-debt-collection-hearing/. A sample accuracy report may be found at
http://files.consumerfinance.gov/f/201412_cfpb_sample-accuracy-report.pdf. http://files.consumerfinance.gov/f/201412_cfpb_sample-accuracy-report.pdf.
4142 See See CFPB, CFPB, Key Dimensions and Processes in the U.S. Credit Reporting System , December 2012, p. 14, at , December 2012, p. 14, at
http://files.consumerfinance.gov/f/201212_cfpb_credithttp://files.consumerfinance.gov/f/201212_cfpb_credit -reporting-white-paper.pdf. -reporting-white-paper.pdf.
~~42 The~~43 T he CRAs use CRAs use a web-baseda web-based tool, the Online Solution for Complete and Accurate Reporting (e-OSCAR),tool, the Online Solution for Complete and Accurate Reporting (e-OSCAR), to to
investigate credit reporting disputes. e-OSCARinvestigate credit reporting disputes. e-OSCAR is ownedis owned and operated by four companies: Equifax, Experian, Innovis, and operated by four companies: Equifax, Experian, Innovis,
and and ~~TransUnion~~T ransUnion. See http://www.e-oscar.org/. . See http://www.e-oscar.org/.
4344 See See Consumer Data Industry Association, “New PublicConsumer Data Industry Association, “New Public Record Credit Reporting StandardsRecord Credit Reporting Standards to Begin Julyto Begin July 1, 2017; 1, 2017;
Civil JudgmentsCivil Judgments and some and some ~~Tax~~T ax Liens to be removed from many credit reports,” Liens to be removed from many credit reports,” ~~press~~p ress release, June 28, 2017, at release, June 28, 2017, at
http://s3.amazonaws.com/rdcms-cdia/files/production/public/PDFs/CDIA.NCAP.July1Changes.6.28.pdf. http://s3.amazonaws.com/rdcms-cdia/files/production/public/PDFs/CDIA.NCAP.July1Changes.6.28.pdf.
~~44 Title~~45 T itle I of H.R. 3621 I of H.R. 3621.
~~45 §110 of H.R. 3621.~~
~~46 Title IV H.R. 3621~~; H.R. 5332, §4. 46 H.R. 3621, §110. 47 T itle IV of H.R. 3621. 48 H.R. 5332, §3. 49 H.R. 5332, §4. .
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Length of Time to Retain Negative Information Policymakers have also considered the appropriate length of time negative information should be al owed to remain on a credit report. Negative information general y refers to delinquencies or defaults, which typical y remain on credit reports for seven years. Negative information in a credit report often results in a consumer appearing to pose a greater risk of default or other negative behavior. This may lead a consumer to either pay more for financial services or, in some cases, be denied access to credit entirely. Limiting a consumer’s access to certain financial cases, be denied access to credit entirely. Limiting a consumer’s access to certain financial
services, such as depository checking accounts or lower cost loans, may disproportionately affect services, such as depository checking accounts or lower cost loans, may disproportionately affect
the consumer’s cost of engaging in financial transactions. Similarly, the use of consumer data the consumer’s cost of engaging in financial transactions. Similarly, the use of consumer data
reports by potential employers, discussed below, may limit job opportunities that could arguably reports by potential employers, discussed below, may limit job opportunities that could arguably
help applicants overcome financial help applicants overcome financial ~~challenges~~chal enges and thereby improve their credit histories. and thereby improve their credit histories.47
50 Retaining negative information on credit reports for an extended period of time may pose benefits Retaining negative information on credit reports for an extended period of time may pose benefits
and detriments. On the one hand, under circumstances in which the underlying information in a and detriments. On the one hand, under circumstances in which the underlying information in a
consumer data report is inaccurate or out of date, consumers may improperly be considered to consumer data report is inaccurate or out of date, consumers may improperly be considered to
pose a greater risk to a firm. In that case, the consumer may be offered costlier credit options (or pose a greater risk to a firm. In that case, the consumer may be offered costlier credit options (or
even face denials of credit) that do not accurately reflect the consumer’s actual risk of default. In even face denials of credit) that do not accurately reflect the consumer’s actual risk of default. In
other cases, consumers also may unfairly be considered to pose a greater risk now due to other cases, consumers also may unfairly be considered to pose a greater risk now due to
circumstances in the past that they have since overcome. On the other hand, the longer circumstances in the past that they have since overcome. On the other hand, the longer
information remains on the credit report arguably information remains on the credit report arguably ~~allows~~al ows lenders to see long-term trends that may lenders to see long-term trends that may
be helpful for distinguishing between a rare occurrence and a consistent pattern in a consumer’s be helpful for distinguishing between a rare occurrence and a consistent pattern in a consumer’s
behavior. Shorter or insufficient periods of time in which negative tradelines appear on consumer behavior. Shorter or insufficient periods of time in which negative tradelines appear on consumer
reports may also compromise the ability to compute reliable scores. If lenders view credit reports reports may also compromise the ability to compute reliable scores. If lenders view credit reports
and scores as unreliable due to premature removal of negative information, they could increase and scores as unreliable due to premature removal of negative information, they could increase
downpayment requirements across the board for downpayment requirements across the board for ~~all~~ al credit applicants or reduce loan amounts. In credit applicants or reduce loan amounts. In
short, lenders who are uncertain about data reliabilityshort, lenders who are uncertain about data reliability might adopt stricter underwriting and might adopt stricter underwriting and
lending policies. In addition to restricting credit access lending policies. In addition to restricting credit access ~~generally~~general y, this could reduce competition , this could reduce competition
by al owing~~by allowing~~ lenders with an established relationship and more information on a consumer to lenders with an established relationship and more information on a consumer to
provide more favorable terms to that consumer than other companies. In addition, the Association provide more favorable terms to that consumer than other companies. In addition, the Association
of Certified Fraud Examiners (ACFE) found that poor credit can signal criminal activity, and of Certified Fraud Examiners (ACFE) found that poor credit can signal criminal activity, and
earlier removal of negative information may make it more difficult for an organization to detect earlier removal of negative information may make it more difficult for an organization to detect
fraud, which may be particularly costly for fraud, which may be particularly costly for ~~small~~ smal businesses and nonprofit organizations.businesses and nonprofit organizations.48
51 Many preparers and users of credit scores have adopted weighting schemes that place less weight Many preparers and users of credit scores have adopted weighting schemes that place less weight
on older information in a consumer data report. Maintaining longer (rather than shorter) durations on older information in a consumer data report. Maintaining longer (rather than shorter) durations
of negative tradelines on reports of negative tradelines on reports ~~allows~~al ows preparers to make greater use of variable-weighted preparers to make greater use of variable-weighted
algorithms to calculate scores, which may be useful when the importance of a weight needs to be algorithms to calculate scores, which may be useful when the importance of a weight needs to be
modified over time. In addressing this policy issue, H.R. 3621 would shorten the time period that modified over time. In addressing this policy issue, H.R. 3621 would shorten the time period that
adverse information could remain on a person’s credit report by three years (such that it remains adverse information could remain on a person’s credit report by three years (such that it remains
on the report for a total of four years), among other things.on the report for a total of four years), among other things.49

~~47 See~~ 52 50 See Dana Dratch, “States Weigh Limits on Credit Checks for Employment,” CreditCards.com, at Dana Dratch, “States Weigh Limits on Credit Checks for Employment,” CreditCards.com, at
http://www.creditcards.com/credithttp://www.creditcards.com/credit -card-news/states-weigh-limits-credit-checks-for-employment-card-news/states-weigh-limits-credit-checks-for-employment -1282.php. -1282.php.
4851 See See Michelle Long, “Internal Controls for Small BusinessesMichelle Long, “Internal Controls for Small Businesses to Reduceto Reduce the Risk of Fraud,”the Risk of Fraud,” Intuit, at Intuit, at
http://longforsuccess.com/wp-content/uploads/2010/09/Good-Internal-Controls.pdf; and Association of Certified Fraud http://longforsuccess.com/wp-content/uploads/2010/09/Good-Internal-Controls.pdf; and Association of Certified Fraud
Examiners (ACFE), Report to the Nations on Occupational Fraud and Abuse:Examiners (ACFE), Report to the Nations on Occupational Fraud and Abuse: 2012 Global2012 Global ~~Fraud~~ Fraud Study, FraudStudy, Fraud Q&A Q&A
with James Ratley, President and CEO of the ACFE, at https://www.acfe.com/uploadedFiles/ACFE_Website/Content/with James Ratley, President and CEO of the ACFE, at https://www.acfe.com/uploadedFiles/ACFE_Website/Content/
rttn/2012-report-to-nations.pdf. Approximately 36% of fraudsters live beyond their means and 27% undergorttn/2012-report-to-nations.pdf. Approximately 36% of fraudsters live beyond their means and 27% undergo personal personal
financial difficulties.financial difficulties. ~~See~~ See Preventing and Detecting Fraud in Not-For-Profit Organizations, at , at
https://www.kellerowens.com/wp-content/uploads/2012/07/Fraud-Booklethttps://www.kellerowens.com/wp-content/uploads/2012/07/Fraud-Booklet -2012-Revised-Version.pdf. -2012-Revised-Version.pdf.
~~49 §401 of~~52 H.R. 3621 H.R. 3621, §401. .
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Rehabilitation of Education Loans
Borrowers Borrowers who default on some federalwho default on some federal student loan programsstudent loan programs (defined as not having made a payment in more (defined as not having made a payment in more
than 270 days) have a one-timethan 270 days) have a one-time loan rehabilitation option.loan rehabilitation option.5053 A loan rehabilitation (as opposed to a loan A loan rehabilitation (as opposed to a loan
consolidation) requires a defaulted borrowerconsolidation) requires a defaulted borrower to maketo make 9 on-time monthly payments during a period of 10 9 on-time monthly payments during a period of 10
consecutive months.consecutive months.5154 The loan is considered rehabilitated if the borrower The loan is considered rehabilitated if the borrower ~~satisfies~~ satisfies the requirements,the requirements, and then and then
the loan may be reinstated. In addition, the borrower’sthe loan may be reinstated. In addition, the borrower’s credit report is credit report is ~~generally~~ general y updated to show that the loan is updated to show that the loan is
no longer in default (or the default record would be eliminated); however, the informationno longer in default (or the default record would be eliminated); however, the information pertaining to the late pertaining to the late
payments that led up to the rehabilitation would stil remainpayments that led up to the rehabilitation would stil remain for seven years.for seven years.52
55 By contrast, students who default on private loans are lessBy contrast, students who default on private loans are less ~~likely~~ likely to receiveto receive a rehabilitation option.a rehabilitation option.5356 P.L. P.L. 115-174, 115-174,
Section 602, Section 602, ~~allows~~ al ows a borrowera borrower a one-timea one-time opportunity to removeopportunity to remove a reported default on a qualified (private) a reported default on a qualified (private)
student loan from a credit report if the borrowerstudent loan from a credit report if the borrower ~~satisfies~~ satisfies the requirementsthe requirements of loan rehabilitation programsof loan rehabilitation programs that that
private lenders may be wil ing to offer (with the approval of prudential regulators), which is analogous to the private lenders may be wil ing to offer (with the approval of prudential regulators), which is analogous to the
procedures fol owedprocedures fol owed when federal student loans are in default.when federal student loans are in default.5457 However, However, ~~depositories (i.e.,~~ depositories (i.e., banks and credit banks and credit
unions), which are regulated for safety and soundness, treat their student loans likeunions), which are regulated for safety and soundness, treat their student loans like ~~all~~ al other private consumer other private consumer
loans. Private student loans must stilloans. Private student loans must stil satisfy underwriting requirements,satisfy underwriting requirements, ~~typically~~ typical y requiring co-signers who become requiring co-signers who become
responsibleresponsible for the loans if the students are unable to repay. After 120 days past due (closedfor the loans if the students are unable to repay. After 120 days past due (closed -end), consumer loans -end), consumer loans
held by depositoriesheld by depositories are treated as uncol ectible.are treated as uncol ectible.55 58 The Office of the Comptrol erThe Office of the Comptrol er of the Currency also points out: of the Currency also points out:
“Banks have some“Banks have some latitude to offer similarlatitude to offer similar federal workout programs to private student loans. Banks, however, federal workout programs to private student loans. Banks, however,
should do so while adhering to safety and soundness requirementsshould do so while adhering to safety and soundness requirements and fol owingand fol owing existing banking guidance and existing banking guidance and
GAAP.”GAAP.”5659 Apart from safety and soundness requirements, Apart from safety and soundness requirements, the informationthe information pertaining to the late payments that led pertaining to the late payments that led
up to the rehabilitation would likelyup to the rehabilitation would likely remain on the students’ credit reportsremain on the students’ credit reports for seven years even if the default for seven years even if the default
records records were removed.were removed. Hence,Hence, this information would stilthis information would stil be likelybe likely to be incorporated in students’ credit scores. to be incorporated in students’ credit scores.
H.R. 3621 would require credit bureaus to removeH.R. 3621 would require credit bureaus to remove adverse information for privateadverse information for private student loan borrowersstudent loan borrowers who who
have demonstrated a history of repayment, similarhave demonstrated a history of repayment, similar to federal student loans.to federal student loans.5760 Private lenders Private lenders currently have currently have
discretion in offering rehabilitation; under H.R. 3621, however,discretion in offering rehabilitation; under H.R. 3621, however, ~~all~~ al private student loan borrowersprivate student loan borrowers would have the would have the
right to obtain loan rehabilitation.right to obtain loan rehabilitation. This provision would increase the ability of private student loan borrowersThis provision would increase the ability of private student loan borrowers to to
receivereceive rehabilitation.rehabilitation. Because this practice would likelyBecause this practice would likely increase costs on financial institutions, as discussed above, increase costs on financial institutions, as discussed above,
this provisionthis provision might reduce the wil ingnessmight reduce the wil ingness of lendersof lenders to originate private student loans.to originate private student loans.5861
Inconsistent Billing and Reporting Practices: Medical Tradelines
Another policy issue that often arises in connection with credit reporting is that different holders Another policy issue that often arises in connection with credit reporting is that different holders
of consumer debt of consumer debt ~~bill~~ bil differently and report to the CRAs differently. Inconsistent reporting differently and report to the CRAs differently. Inconsistent reporting

~~50 See~~ 53 See CFPB, “What does it mean to ‘default’ on my federal student loans?” press release, AugustCFPB, “What does it mean to ‘default’ on my federal student loans?” press release, August 4, 2016, at 4, 2016, at
https://www.consumerfinance.gov/ask-cfpb/whathttps://www.consumerfinance.gov/ask-cfpb/what -does-it-mean-to-default-does-it-mean-to-default -on-my-federal-student-loans-en-649/. -on-my-federal-student-loans-en-649/.
~~51 See CRS~~ 54 See CRS Report R40122, Report R40122, Federal Student Loans Made Under the Federal Family Education Loan Program and the
William D. Ford Federal Direct Loan Program : Term s~~: Terms~~ and Conditions for Borrowers,, by David P. Smole. by David P. Smole.
5255 See See Experian, “What is student loan rehabilitation?” February 3, 2020, at https://www.experian.com/blogs/ask-Experian, “What is student loan rehabilitation?” February 3, 2020, at https://www.experian.com/blogs/ask-
experian/whatexperian/what -is-student-is-student -loan-rehabilitation/. -loan-rehabilitation/.
5356 CFPB, CFPB, Private Student Loans, Report to the Senate Committee on Banking, Housing, and Urban Affairs, the Senate , Report to the Senate Committee on Banking, Housing, and Urban Affairs, the Senate
Committee on Committee on ~~Health~~Healt h, Education, Labor, and Pensions, the House of Representatives Committee on Financial Services, , Education, Labor, and Pensions, the House of Representatives Committee on Financial Services,
and the House of Representatives Committee on Education and the Workforce, August 29, 2012, at and the House of Representatives Committee on Education and the Workforce, August 29, 2012, at
http://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-Studenthttp://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-Student -Loans.pdf. -Loans.pdf.
5457 P.L. 115-174, §601 prohibits a private student loan lender from accelerating a debt or declaring P.L. 115-174, §601 prohibits a private student loan lender from accelerating a debt or declaring a default against a a default against a
student loan borrowerstudent loan borrower upon the bankruptcy or death of a coupon the bankruptcy or death of a co -signer. Section 601 also releases a co-signer from the debt -signer. Section 601 also releases a co-signer from the debt
obligation upon the death of the student. obligation upon the death of the student.
5558 After 120-180 days, a depository firm may hire a debt After 120-180 days, a depository firm may hire a debt collector, who receives a percentage of the collected amount, collector, who receives a percentage of the collected amount,
or sellor sell the defaulted loan outright to a collection agency. the defaulted loan outright to a collection agency. ~~The~~T he debt collection process is guided debt collection process is guided by the Fair Debt by the Fair Debt
Collection Practices Act (P.L. 90-321). Collection Practices Act (P.L. 90-321).
5659 See See Office of the Comptroller of the Currency, Office of the Comptroller of the Currency, Comptroller’s Handbook, Version 1.0, May 2016, p. 34, at , Version 1.0, May 2016, p. 34, at
https://www.occ.treas.gov/publications/publications-by-type/comptrollers-handbook/studenthttps://www.occ.treas.gov/publications/publications-by-type/comptrollers-handbook/student -lending/pub-ch-student-lending/pub-ch-student --
lending.pdf. lending.pdf.
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practices result in variation of the timing with which unpaid debts appear on consumer reports. practices result in variation of the timing with which unpaid debts appear on consumer reports.
For example, medical providers may assign unpaid For example, medical providers may assign unpaid ~~bills~~bil s to debt collectors or to debt collectors or ~~sell~~ sel outstanding outstanding
debts to debt buyers. Some medical providers may assign or debts to debt buyers. Some medical providers may assign or ~~sell~~ sel the debt after 60 days, but some the debt after 60 days, but some
may do so after 30 days (by comparison, most bank credit card delinquencies are assigned or sold may do so after 30 days (by comparison, most bank credit card delinquencies are assigned or sold
after 180 days). Some firms may turn obligations over to collections as a tool to encourage after 180 days). Some firms may turn obligations over to collections as a tool to encourage
consumers to settle unpaid balances, blurring the distinction between consumers to settle unpaid balances, blurring the distinction between ~~billing~~ bil ing and collecting and collecting
policies.policies.5962 Debt collectors or buyers subsequently furnish negative information to CRAs, causing Debt collectors or buyers subsequently furnish negative information to CRAs, causing
tradeline accounts to sometimes appear on consumer reports. tradeline accounts to sometimes appear on consumer reports.
The CFPB used a random sample of approximately 5 The CFPB used a random sample of approximately 5 ~~million~~ mil ion consumers as of December 2012 to consumers as of December 2012 to
determine what types of tradeline accounts were reported most frequently and the amounts.determine what types of tradeline accounts were reported most frequently and the amounts.6063 The The
CFPB found that approximately 33% of credit reports surveyed had collection tradelines, and CFPB found that approximately 33% of credit reports surveyed had collection tradelines, and
approximately 52% of those collection tradelines were related to medical collections. After approximately 52% of those collection tradelines were related to medical collections. After
medical obligations, the CFPB found that the remaining collection tradelines of significant medical obligations, the CFPB found that the remaining collection tradelines of significant
relevance were associated with unclassified debts (17.3%), cable or relevance were associated with unclassified debts (17.3%), cable or ~~cellular bills~~cel ular bil s (8.2%), utilities (8.2%), utilities
(7.3%), and retail stores (7.2%). (7.3%), and retail stores (7.2%). ~~All~~ Al other categories of collectible tradelines were approximately other categories of collectible tradelines were approximately
2% or less of the survey. For 85% of the respondents, the amounts owed for medical debt were 2% or less of the survey. For 85% of the respondents, the amounts owed for medical debt were
for less than $1,000. In short, more than half of collection tradelines were associated with medical for less than $1,000. In short, more than half of collection tradelines were associated with medical
debt, and they were for relatively debt, and they were for relatively ~~small~~ smal amounts. amounts. ~~Specifically~~Specifical y, the median amount owed for the , the median amount owed for the
medical collection tradelines was $207, and 75% of medical collection tradelines was $207, and 75% of ~~all~~ al medical collection tradelines were under medical collection tradelines were under
$490. $490.
One form of consumer debt—medical debt—is most often disputed by consumers and raises One form of consumer debt—medical debt—is most often disputed by consumers and raises
specific policy issues related to inconsistent specific policy issues related to inconsistent ~~billing~~ bil ing and reporting practices. According to the and reporting practices. According to the
CFPB study, consumers are unlikely to know when and how much various medical services cost CFPB study, consumers are unlikely to know when and how much various medical services cost
in advance, particularly those associated with accidents and emergencies. People often have in advance, particularly those associated with accidents and emergencies. People often have
difficulty understanding co-pays and health insurance deductibles.difficulty understanding co-pays and health insurance deductibles.6164 Consequently, consumers Consequently, consumers
may delay paying medical obligations as they either assume their insurance companies may delay paying medical obligations as they either assume their insurance companies ~~will~~ wil pay or pay or
attempt to figure out why they have been attempt to figure out why they have been ~~billed~~bil ed, which often results in medical debt appearing , which often results in medical debt appearing
unpaid on credit reports. unpaid on credit reports.
Regulators and industry have taken actions that may reduce medical tradelines and their Regulators and industry have taken actions that may reduce medical tradelines and their
associated negative effects on consumer credit data. On December 31, 2014, the Internal Revenue associated negative effects on consumer credit data. On December 31, 2014, the Internal Revenue
Service (IRS) announced a final rule requiring the separation of Service (IRS) announced a final rule requiring the separation of ~~billing~~ bil ing and collection policies of and collection policies of
nonprofit hospitals.nonprofit hospitals.6265 Under the rule, hospitals that have or are pursuing tax-exempt status are Under the rule, hospitals that have or are pursuing tax-exempt status are
required to make reasonable efforts to determine whether their patients are eligible for financial required to make reasonable efforts to determine whether their patients are eligible for financial
assistance before engaging in “extraordinary collection actions,” which may include turning a assistance before engaging in “extraordinary collection actions,” which may include turning a

~~57 Title~~ 60 T itle III of H.R. 3621. III of H.R. 3621.
5861 For more information, see CRS For more information, see CRS Report R45339, Report R45339, Banking: Current Expected Credit Loss (CECL),, by Raj Gnanarajah. by Raj Gnanarajah.
5962 See See CFPB, CFPB, Consumer Credit Reports: A Study of Medical and Non-Medical Collections, December 2014, p. 36, at , December 2014, p. 36, at
http://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credithttp://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit -medical-and-non-medical-collections.pdf. -medical-and-non-medical-collections.pdf.
Other firms may not immediately employ a collections strategy to encourage repayment of obligations for fears of Other firms may not immediately employ a collections strategy to encourage repayment of obligations for fears of
reputational risk. reputational risk.
6063 See See CFPB, CFPB, Consumer Credit Reports: A Study of Medical and Non-Medical Collections, December 2014, at , December 2014, at
http://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credithttp://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit -medical-and-non-medical-collections.pdf. -medical-and-non-medical-collections.pdf.
6164 Confusion about costs and co-pays may increase when medical Confusion about costs and co-pays may increase when medical care iscare is administered outside of a consumer’s state of administered outside of a consumer’s state of
residence, given that health insurers and providers determine costs that vary and are influenced by state regulations.residence, given that health insurers and providers determine costs that vary and are influenced by state regulations. See See
CRSCRS In FocusIn Focus IF10043, IF10043, Introduction to Financial Services: Insurance, by Baird Webel. , by Baird Webel.
6265 See See Department of the Treasury, Internal Revenue Service, Department of the Treasury, Internal Revenue Service, New Requirements for 501(c)(3) Hospitals Under the
Affordable Care Act, at https://www.irs.gov/charities-non-profits/charitable-organizations/requirements-for-501c3-, at https://www.irs.gov/charities-non-profits/charitable-organizations/requirements-for-501c3-
~~hospitals~~hospit als-under-the-affordable-care-act-section-501r. -under-the-affordable-care-act-section-501r.
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debt over to a collection agency (thus creating a medical tradeline) or garnishing wages. In short, debt over to a collection agency (thus creating a medical tradeline) or garnishing wages. In short,
tax-exempt hospitals must tax-exempt hospitals must ~~allow~~al ow patients 120 days from the date of the first patients 120 days from the date of the first ~~billing~~bil ing statement to statement to
pay the obligation before initiating collection procedures.pay the obligation before initiating collection procedures.6366 The IRS rule only impacts nonprofit The IRS rule only impacts nonprofit
hospitals, but, on September 15, 2017, the three major credit reporting agencies—Experian, hospitals, but, on September 15, 2017, the three major credit reporting agencies—Experian,
Equifax, and TransUnion—established a 180-day (6 month) waiting period before posting a Equifax, and TransUnion—established a 180-day (6 month) waiting period before posting a
medical collection of any type on a consumer credit report.medical collection of any type on a consumer credit report.6467 In addition, P.L. 115-174, Section In addition, P.L. 115-174, Section
302, amended the FCRA to provide credit reporting protections for veterans as follows: 302, amended the FCRA to provide credit reporting protections for veterans as follows:
 CRAs must exclude certain medical debt incurred by a veteran from his or her  CRAs must exclude certain medical debt incurred by a veteran from his or her
credit report if the hospital care or medical services relating to the debt predates credit report if the hospital care or medical services relating to the debt predates
the credit report by less than one year. the credit report by less than one year.
 CRAs must remove from the credit report a veteran’s fully paid or settled  CRAs must remove from the credit report a veteran’s fully paid or settled
medical debt previously characterized as delinquent, charged off, or in collection. medical debt previously characterized as delinquent, charged off, or in collection.
 CRAs must establish a dispute process and verification procedures for veterans’  CRAs must establish a dispute process and verification procedures for veterans’
medical debt. medical debt.
 Active duty military personnel receive free credit monitoring.  Active duty military personnel receive free credit monitoring.
H.R. 3621 H.R. 3621 and H.R. 5330 would impose restrictions on the appearance of medical collections on consumer credit would impose restrictions on the appearance of medical collections on consumer credit
reports, extending the CRA’s 2017 rule to 365 days and excluding reports, extending the CRA’s 2017 rule to 365 days and excluding ~~all debts related to medically~~
~~necessary care.65 The bill~~al debts related to medical y necessary care.68 H.R. 3621 would also require expedited removal of would also require expedited removal of ~~all fully~~ al fully repaid or settled repaid or settled
medical debts.medical debts.66
69 Consumer Rights in the Credit Reporting System
Consumers sometimes find it difficult to advocate for themselves when credit reporting issues Consumers sometimes find it difficult to advocate for themselves when credit reporting issues
arise because they are not aware of their rights and how to exercise them. According to a CFPB arise because they are not aware of their rights and how to exercise them. According to a CFPB
report, some consumers are confused about what credit reports and scores are, find it report, some consumers are confused about what credit reports and scores are, find it ~~challenging~~chal enging
to obtain credit reports and scores, and struggle to understand the contents of their credit reports.to obtain credit reports and scores, and struggle to understand the contents of their credit reports.67
70 The CFPB receives more credit reporting complaints than complaints in any other industry it The CFPB receives more credit reporting complaints than complaints in any other industry it
regulates.regulates.6871 Currently, the CFPB provides financial education resources on its website to help Currently, the CFPB provides financial education resources on its website to help
educate consumers about their rights regarding consumer reporting. The credit bureaus’ websites educate consumers about their rights regarding consumer reporting. The credit bureaus’ websites
also provide information about how to dispute inaccurate information, and consumers can contact also provide information about how to dispute inaccurate information, and consumers can contact
them by phone or mail. them by phone or mail.
H.R. 3621 H.R. 3621 and H.R. 5332 would require that CRAs provide free credit scores in their annual free credit report.would require that CRAs provide free credit scores in their annual free credit report.69
~~The bill also would allow~~72 H.R. 3621 would al ow consumers to be entitled to free credit reports at other times, for consumers to be entitled to free credit reports at other times, for
example, whenever they apply for a new mortgage, auto loan, or student loan, or if a example, whenever they apply for a new mortgage, auto loan, or student loan, or if a ~~consumer’s~~

~~63 See~~ 66 See Department of the Treasury, Internal Revenue Service, “Additional RequirementsDepartment of the Treasury, Internal Revenue Service, “Additional Requirements for Charitable Hospitals; for Charitable Hospitals;
Community Health Needs AssessmentsCommunity Health Needs Assessments for Charitable Hospitals; Requirements of a Section 4959 Excise for Charitable Hospitals; Requirements of a Section 4959 Excise ~~Tax~~T ax Return Return
and and ~~Time~~T ime for Filing the Return,” 79 for Filing the Return,” 79 Federal Register 78954-79016, December 31, 2014. 78954-79016, December 31, 2014.
6467 See See Experian, “Medical Debt andExperian, “Medical Debt and Your Credit Score:Your Credit Score: Here’s What You NeedHere’s What You Need to Know,” press release, Augustto Know,” press release, August 8, 8,
2017, at https://www.experian.com/blogs/ask-experian/medical-debt-and-your-credit2017, at https://www.experian.com/blogs/ask-experian/medical-debt-and-your-credit -score/. -score/.
~~65 §403 of H.R. 3621.~~
~~66 §403 of H.R. 3621.~~
6768 H.R. 3621, §403; H.R. 5330, §§2-3. 69 H.R. 3621, §403. 70 CFPB, CFPB, Consumer Voices on Credit Reports and Scores, February 2015, https://files.consumerfinance.gov/f/, February 2015, https://files.consumerfinance.gov/f/
201502_cfpb_report_consumer-voices-on-credit-reports-and-scores.pdf. 201502_cfpb_report_consumer-voices-on-credit-reports-and-scores.pdf.
6871 CFPB, CFPB, Complaint Snapshot: Mortgage, January 2019, pp. 3-6, at https://files.consumerfinance.gov/f/documents/, January 2019, pp. 3-6, at https://files.consumerfinance.gov/f/documents/
cfpb_complaintcfpb_complaint -snapshot-mortage_2019-01_liwsYNV.pdf. -snapshot-mortage_2019-01_liwsYNV.pdf.
~~69 Title~~72 T itle II of H.R. 3621 II of H.R. 3621; H.R. 5332, §2. .
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consumer’s identity is stolen. The report and score used to make underwriting decisions in connection with identity is stolen. The report and score used to make underwriting decisions in connection with
these events would be provided to the consumer. H.R. 3621 would also direct the credit bureaus these events would be provided to the consumer. H.R. 3621 would also direct the credit bureaus
to give consumers more information on dispute rights, and it would require hard inquiries to be to give consumers more information on dispute rights, and it would require hard inquiries to be
limited for a longer 120-day shopping window for certain consumer credit limited for a longer 120-day shopping window for certain consumer credit ~~products70~~products73 (as (as
described in the box “Some Factors Frequently Used to Calculate Credit Scores” above).described in the box “Some Factors Frequently Used to Calculate Credit Scores” above).
H.R. 5332 would require an online consumer portal landing page for consumers to access their credit report and initiate disputes and credit freezes.74 It also would al ow consumers to opt out of having their credit report sold to third parties.75 Appropriate Purposes for Using Credit Bureau Data:
Employment Decisions
Policy questions exist regarding the appropriate uses of credit bureau data, particularly for uses Policy questions exist regarding the appropriate uses of credit bureau data, particularly for uses
outside of extending credit to consumers.outside of extending credit to consumers.7176 For example, credit information can be used for For example, credit information can be used for
employment decisions. According to the Society for Human Resource Management (a human employment decisions. According to the Society for Human Resource Management (a human
resources professional society), in 2012, almost half of surveyed organizations in their resources professional society), in 2012, almost half of surveyed organizations in their
membership used credit background checks on some of their job applications.membership used credit background checks on some of their job applications.7277 Employers report Employers report
that they use this information to reduce the likelihoodthat they use this information to reduce the likelihood of employee theft or embezzlement and to of employee theft or embezzlement and to
reduce legal liabilityreduce legal liability for negligent hiring.for negligent hiring.7378 To comply with the FCRA, employers must inform an To comply with the FCRA, employers must inform an
applicant that his or her credit report is a part of a hiring decision, and acquire the applicant’s applicant that his or her credit report is a part of a hiring decision, and acquire the applicant’s
written permission to obtain the report. If an applicant is denied a job, or if the employer takes written permission to obtain the report. If an applicant is denied a job, or if the employer takes
another adverse action due to information on a credit report, then the applicant must be given a another adverse action due to information on a credit report, then the applicant must be given a
copy of the report and a summary of their FCRA rights.copy of the report and a summary of their FCRA rights.7479
Whether the use of credit information in employment decisions unnecessarily harms prospective Whether the use of credit information in employment decisions unnecessarily harms prospective
job applicants is debatable. For some occupations, past financial difficulties may increase the job applicants is debatable. For some occupations, past financial difficulties may increase the
likelihood,likelihood, for example, that the employee could be bribed or compromised in some way; for example, that the employee could be bribed or compromised in some way;
however, this information may not be essential for success in however, this information may not be essential for success in ~~all~~ al occupations. Currently, many occupations. Currently, many
states limit employers’ use of credit information for employment decisions.states limit employers’ use of credit information for employment decisions.7580 H.R. 3621 would H.R. 3621 would
ban the use of credit information for employment decisions, unless required by law or for a ban the use of credit information for employment decisions, unless required by law or for a
national security investigation.national security investigation.76
Consumers with Limited Credit Histories and Use of Alternative
~~Scoring Methods~~
~~The CFPB estimates that credit scores cannot be generated for approximately 20% of the U.S.~~
~~population due to their limited credit histories.77 The CFPB distinguishes between different types~~

~~70 §102 and §705 of H.R. 3621.~~
7181 73 H.R. 3621, §102 and §705. 74 H.R. 5332, §2. 75 H.R. 5332, §2. 76 Whether credit information should be used Whether credit information should be used in insurance decisionsin insurance decisions is also a topic of congressional interest, see H.R. is also a topic of congressional interest, see H.R.
1756. 1756.
7277 Society for Human Resource Society for Human Resource Management (SHRM), Management (SHRM), Background Checking—The Use of Credit Background Checks
in Hiring Decisions, July, July 19, 2012, at https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/19, 2012, at https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/
pages/creditbackgroundchecks.aspx. pages/creditbackgroundchecks.aspx.
7378 SHRM, SHRM, Background Checking—The Use of Credit Background Checks in Hiring Decisions. .
~~74 FTC~~79 FT C, , Using Credit Reports: What Employers Need to Know, October 2016, at https://www.ftc.gov/tips-advice/, October 2016, at https://www.ftc.gov/tips-advice/
business-center/guidance/using-consumer-reports-whatbusiness-center/guidance/using-consumer-reports-what -employers-need-know. -employers-need-know.
7580 Rosemarie Lally, Rosemarie Lally, Using Workers’ ~~Credit~~ Credit Information Increasingly Prohibited, Society for Human Resource , Society for Human Resource
Management, July 28, 2015, at https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/Management, July 28, 2015, at https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/
pages/states-credit-history.aspx. pages/states-credit-history.aspx.
~~76 Title VI of H.R. 3621.~~
77 For more information on credit access policy issues, see CRS Report R45979, Financial Inclusion and Credit Access
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~~of consumers with limited credit histories.78~~ Consumers with Limited Credit Histories and Use of Alternative Scoring Methods The CFPB estimates that credit scores cannot be generated for approximately 20% of the U.S. population due to their limited credit histories.82 The CFPB distinguishes between different types of consumers with limited credit histories.83 One category of consumers, referred to as One category of consumers, referred to as credit
invisibles, have no credit record at the three largest credit bureaus and, thus, do not exist for the , have no credit record at the three largest credit bureaus and, thus, do not exist for the
purposes of credit reporting. According to the CFPB, this group represents 11.0% of the U.S. purposes of credit reporting. According to the CFPB, this group represents 11.0% of the U.S.
adult population, or 26 adult population, or 26 ~~million~~ mil ion consumers. Another category of consumers do exist (have a credit consumers. Another category of consumers do exist (have a credit
record), but they record), but they ~~still~~ stil cannot be scored or are considered cannot be scored or are considered nonscorable. Nonscorable consumers . Nonscorable consumers
either have insufficient (short) histories or outdated (stale) histories. The insufficient and stale either have insufficient (short) histories or outdated (stale) histories. The insufficient and stale
unscored groups, each containing more than 9 unscored groups, each containing more than 9 ~~million~~mil ion individuals, collectively represent 8.3% of individuals, collectively represent 8.3% of
the U.S. adult population, or approximately 19 the U.S. adult population, or approximately 19 ~~million~~ mil ion consumers according to the CFPB. consumers according to the CFPB.
Younger adults may be part of the credit invisible or nonscorable population because they lack a Younger adults may be part of the credit invisible or nonscorable population because they lack a
sufficient credit history. As consumers get older, however, the problem of being credit invisible or sufficient credit history. As consumers get older, however, the problem of being credit invisible or
belonging to the insufficient part of the nonscorable group belonging to the insufficient part of the nonscorable group ~~typically~~typical y declines, but may begin to declines, but may begin to
reoccur after the age of 60. Older adults, who may have considerably reduced their credit usage, reoccur after the age of 60. Older adults, who may have considerably reduced their credit usage,
perhaps as they prepare to enter retirement years, may encounter the problem of having stale perhaps as they prepare to enter retirement years, may encounter the problem of having stale
credit records.credit records.7984 Because credit scoring models vary by firms, consumers that cannot be scored by Because credit scoring models vary by firms, consumers that cannot be scored by
some models might some models might ~~still~~ stil have the ability to be scored by other models; thus, the state of being have the ability to be scored by other models; thus, the state of being
nonscorable may depend upon the credit reporting data records and scoring models used. nonscorable may depend upon the credit reporting data records and scoring models used.
Borrowers with missing or impaired credit histories may be able to improve their ability Borrowers with missing or impaired credit histories may be able to improve their ability to get to get
reliablereliable credit scores by using credit building loans, such as credit scores by using credit building loans, such as secured credit cards that require that require
either security deposits as collateral for the amount of the line of credit or links to checking or either security deposits as collateral for the amount of the line of credit or links to checking or
savings accounts, thereby savings accounts, thereby ~~allowing~~al owing lenders to recover funds if payments are missed. The security lenders to recover funds if payments are missed. The security
deposit is refunded if borrowers do not miss payments. Secured credit card lending can help deposit is refunded if borrowers do not miss payments. Secured credit card lending can help
borrowers build or repair their credit histories, assuming that the more favorable customer borrowers build or repair their credit histories, assuming that the more favorable customer
payment activity is reported to credit bureaus. In addition, the use of alternative credit scores may payment activity is reported to credit bureaus. In addition, the use of alternative credit scores may
also help the credit invisibles because other types of consumer payment activity (discussed also help the credit invisibles because other types of consumer payment activity (discussed
below) may be predictive in regard to how borrowers would manage credit. In short, options that below) may be predictive in regard to how borrowers would manage credit. In short, options that
increase the ability to calculate scores for the invisible or currently nonscoreable consumer increase the ability to calculate scores for the invisible or currently nonscoreable consumer
groups could groups could ~~allow~~al ow lenders to better determine the quantity and scope of financial relationships lenders to better determine the quantity and scope of financial relationships
they can establish with such groups. they can establish with such groups.
Alternative credit scoring models could credit scoring models could ~~potentially~~potential y increase accuracy by including additional increase accuracy by including additional
information beyond that which is information beyond that which is ~~traditionally~~ traditional y included in a credit report. For example, some included in a credit report. For example, some
credit score models do not distinguish between unpaid and paid (resolved) tradelines.credit score models do not distinguish between unpaid and paid (resolved) tradelines.8085 Most Most
credit scores are calculated without utility and rent payments information. Arguably, including credit scores are calculated without utility and rent payments information. Arguably, including
~~this information would benefit the credit scores for some individuals with limited or no credit~~
~~histories, potentially increasing their access to—and lowering their costs of—credit.81 Conversely,~~
~~information about medical debts has often been included in credit scores, but the unevenness in~~
~~medical reporting, as previously discussed, and possibly the consumers’ lack of choice in~~
~~incurring medical debt raises questions about whether medical debt tradelines should be~~

82 For more information on credit access policy issues, see CRS Report R45979, Financial Inclusion and Credit Access Policy Issues, by Cheryl R. Cooper. , by Cheryl R. Cooper.
7883 See See Kenneth P. Brevoort, Philipp Grimm, and Michelle Kambara, Kenneth P. Brevoort, Philipp Grimm, and Michelle Kambara, Data Point: Credit Invisibles, CFPB, May 2015, at , CFPB, May 2015, at
http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf. http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf.
~~79 The~~84 T he CFPB estimated some additional information about these groups by age, income, and race. See CFPB estimated some additional information about these groups by age, income, and race. See Kenneth P. Kenneth P.
Brevoort, Philipp Grimm, and Michelle Kambara, Brevoort, Philipp Grimm, and Michelle Kambara, Data Point: Credit Invisibles, CFPB, May 2015, at , CFPB, May 2015, at
http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf. http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf.
~~80 The~~85 T he treatment of paid and unpaid collection tradelines varies among different credit scoring models. See treatment of paid and unpaid collection tradelines varies among different credit scoring models. See “New FICO “New FICO
Score ModelScore Model ~~Could~~ Could Boost Credit for Millions—MedicalBoost Credit for Millions—Medical ~~Bills~~ Bills in Focus,” in Focus,” NerdWallet,, ~~August~~ August 8, 2014, at 8, 2014, at
http://www.nerdwallet.com/blog/health/2014/08/08/new-fico-score-boosthttp://www.nerdwallet.com/blog/health/2014/08/08/new-fico-score-boost -credit-credit -medical-bills-focus/. -medical-bills-focus/.
~~81 Experian, New Study Shows How Alternative Payment Data Helps U.S. Consumers’ Credit Profiles, February 25,~~
~~2015, at https://www.experianplc.com/media/news/2015/alternative-data-to-credit-reports-utilities-and-rent-2015/.~~
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~~considered reliable predictors of creditworthiness or credit performance.82 For this reason, some~~
~~newer versions of credit scoring apply less weight to medical debt.83 In short, developing credit~~
~~scores with new information might allow~~Congressional Research Service 16 Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues this information would benefit the credit scores for some individuals with limited or no credit histories, potential y increasing their access to—and lowering their costs of—credit.86 Conversely, information about medical debts has often been included in credit scores, but the unevenness in medical reporting, as previously discussed, and possibly the consumers’ lack of choice in incurring medical debt raises questions about whether medical debt tradelines should be considered reliable predictors of creditworthiness or credit performance.87 For this reason, some newer versions of credit scoring apply less weight to medical debt.88 In short, developing credit scores with new information might al ow lenders to find new creditworthy consumers. lenders to find new creditworthy consumers.
Regulators and Congress have considered the potential for alternative credit scoring. In 2014, the Regulators and Congress have considered the potential for alternative credit scoring. In 2014, the
Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac—the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac—the
government-sponsored enterprises (GSEs) that purchase mortgages in the secondary market—to government-sponsored enterprises (GSEs) that purchase mortgages in the secondary market—to
consider using more updated credit scoring models in their mortgage underwriting.consider using more updated credit scoring models in their mortgage underwriting.8489 Under P.L. Under P.L.
115-174, FHFA is required to define, through rulemaking, the standards and criteria the GSEs 115-174, FHFA is required to define, through rulemaking, the standards and criteria the GSEs ~~will~~
wil use for validating credit score models used when evaluating whether to purchase a residential use for validating credit score models used when evaluating whether to purchase a residential
mortgage.mortgage.8590 If enacted, H.R. 3621 would direct the CFPB to report to Congress on the impact of If enacted, H.R. 3621 would direct the CFPB to report to Congress on the impact of
using nontraditional data on credit scoring.using nontraditional data on credit scoring.8691
Full implementation of newer versions of credit scoring models, however, may not occur Full implementation of newer versions of credit scoring models, however, may not occur
quickly.quickly.8792 In the mortgage market, upgrading automated underwriting systems is costly for the In the mortgage market, upgrading automated underwriting systems is costly for the
GSEs, FHA, and loan originators. Not GSEs, FHA, and loan originators. Not ~~all originators will~~ al originators wil choose to update their automated choose to update their automated
underwriting systems.underwriting systems.8893 Even if alternative credit scoring models were widely adopted, the credit Even if alternative credit scoring models were widely adopted, the credit
score is not the only variable considered during the underwriting process. Just as several factors score is not the only variable considered during the underwriting process. Just as several factors
are included in the development of a credit score, a credit score is only one of several factors are included in the development of a credit score, a credit score is only one of several factors
included in an automated underwriting model (also referred to as an underwriting scorecard).included in an automated underwriting model (also referred to as an underwriting scorecard).89
~~The debt-to-income ratio, for example, may still be an important variable for mortgage~~
~~underwriting. Higher levels of medical and student loan debts may still affect mortgage~~
~~underwriting decisions.90 Hence, the use of alternative credit scores may help some borrowers~~

~~82 See~~ 94 86 Experian, New Study Shows How Alternative Payment Data Helps U.S. Consumers’ Credit Profiles, February 25, 2015, at https://www.experianplc.com/media/news/2015/alternative-data-to-credit -reports-utilities-and-rent-2015/. 87 See Kenneth P. Brevoort and Michelle Kambara, Kenneth P. Brevoort and Michelle Kambara, Data Point: Medical Debt and Credit Scores, CFPB, May 2014, at , CFPB, May 2014, at
http://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credithttp://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credit -scores.pdf. -scores.pdf.
8388 See See John Ulzheimer, “New FICOJohn Ulzheimer, “New FICO Score Coming Soon to a Credit BureauScore Coming Soon to a Credit Bureau Near Near ~~You~~Yo u,” ,” Credit Sesame Daily, August , August
7, 2014, at http://www.creditsesame.com/blog/new-fico-score-coming-soon/. 7, 2014, at http://www.creditsesame.com/blog/new-fico-score-coming-soon/.
8489 See See Kevin Wack, “Fannie, Freddie to Evaluate Alternative Scoring Models,”Kevin Wack, “Fannie, Freddie to Evaluate Alternative Scoring Models,” American Banker, September 22, 2014, , September 22, 2014,
at http://www.americanbanker.com/issues/179_183/fannie-freddie-to-evaluate-alternative-credit-scoring-models-at http://www.americanbanker.com/issues/179_183/fannie-freddie-to-evaluate-alternative-credit-scoring-models-
1070140-1.html. Similarly, 1070140-1.html. Similarly, ~~the~~t he Federal Housing Federal Housing Administration (FHA), which provides federal mortgage insurance, is Administration (FHA), which provides federal mortgage insurance, is
also considering whether to usealso considering whether to use updated versions of credit scoring models.updated versions of credit scoring models. ~~See~~ See National Association of Realtors, “National Association of Realtors, “ HUD HUD
Secretary Secretary ~~Tells~~T ells Realtors that FHA is Exploring Alternative to Credit Scoring Models to Expand Mortgage Access,” Realtors that FHA is Exploring Alternative to Credit Scoring Models to Expand Mortgage Access,”
newsnews release, April 1, 2015, at http://www.realtor.org/news-releases/2015/04/hud-secretary-tells-realtors-fha-is-release, April 1, 2015, at http://www.realtor.org/news-releases/2015/04/hud-secretary-tells-realtors-fha-is-
exploring-alternative-credit-scoring-models-to-expand-mortgage. exploring-alternative-credit-scoring-models-to-expand-mortgage.
8590 Specifically, the law Specifically, the law ~~allows~~ allows Fannie Mae and FreddieFannie Mae and Freddie Mac to employ alternative credit scoring models when Mac to employ alternative credit scoring models when
purchasing mortgages rather than rely exclusively on the FICO scoring model. Seepurchasing mortgages rather than rely exclusively on the FICO scoring model. See ~~Federal Housing~~ Federal Housing Finance Agency, Finance Agency,
FHFA Announces Decision to Stop Credit Score Initiative: No Decision in 2018; Focus Shifts to ~~Implementing~~Im plem enting New
Law, News, News Release,Release, ~~July~~ July 23, 2018, at https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Decision-to-23, 2018, at https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Decision-to-
Stop-Credit-Score-Initiative.aspx. Stop-Credit-Score-Initiative.aspx.
~~86 §501 of~~91 H.R. 3621 H.R. 3621, §501. 92 See .
~~87 See~~ Mary Ellen Podmolik, “Rollout is SlowMary Ellen Podmolik, “Rollout is Slow for FICO’s Newfor FICO’s New Credit ScoringCredit Scoring Model,” Model,” Chicago Tribune, October 14, , October 14,
2014, at2014, at http://www.chicagotribune.com/classified/realestate/ct-mre-1019-podmolik-homefronthttp://www.chicagotribune.com/classified/realestate/ct-mre-1019-podmolik-homefront -20141014--20141014-
column.html. column.html.
8893 See See Adrian Nazari, “How FICO’sAdrian Nazari, “How FICO’s ~~New~~ New Credit Score Will Impact Consumers,” Credit Score Will Impact Consumers,” Huffington Post, September 19, 2014, , September 19, 2014,
at http://www.huffingtonpost.com/adrian-nazari/how-ficos-new-creditat http://www.huffingtonpost.com/adrian-nazari/how-ficos-new-credit -score-will-impact-score-will-impact -consumers_b_5844530.html. -consumers_b_5844530.html.
8994 An underwriting An underwriting scorecard may includescorecard may include information such as income, assets, andinformation such as income, assets, and employment history obtained from employment history obtained from
the borrower’s application not taken into account while preparing the credit score. Seethe borrower’s application not taken into account while preparing the credit score. See ~~Federal~~ Federal Deposit Insurance Deposit Insurance
Corporation, Corporation, Credit Card Activities Manual, Chapter VIII.-Scoring and Modeling, March 2007, at Congressional Research Service 17 Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues The debt-to-income ratio, for example, may stil be an important variable for mortgage underwriting. Higher levels of medical and student loan debts may stil affect mortgage underwriting decisions.95 Hence, the use of alternative credit scores may help some borrowers close to a threshold or borderline, yet stil not translate into significant changes in credit access ~~Manual, Chapter VIII.-Scoring and Modeling, March 2007, at~~
~~https://www.fdic.gov/regulations/examinations/credit_card/pdf_version/ch8.pdf; and Cary Collins, Keith D. Harvey,~~
~~and Peter Nigro, “The Influence of Bureau Scores, Customized Scores, and Judgmental Review on the Bank~~
~~Underwriting Decision-Making Process,” Journal of Real Estate Research, vol. 24, no. 2 (2002), pp. 129-152.~~
~~90 Carrying higher levels of debt may become an equally or, under some circumstances, a more important factor in~~
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~~close to a threshold or borderline, yet still not translate into significant changes in credit access~~
across the board. across the board.
Data Protection and Security Issues
Congressional interest in data protection and security in the consumer data industry has increased Congressional interest in data protection and security in the consumer data industry has increased
following the announcement, on September 7, 2017, of the Equifax cybersecurity breach that following the announcement, on September 7, 2017, of the Equifax cybersecurity breach that
~~potentially~~potential y revealed sensitive consumer data information for 143 revealed sensitive consumer data information for 143 ~~million~~mil ion U.S. consumers. U.S. consumers.9196 CRAs CRAs
are subject to the data protection requirements of Section 501(b) of the Gramm-Leach-Bliley Act are subject to the data protection requirements of Section 501(b) of the Gramm-Leach-Bliley Act
(GLBA).(GLBA).9297 Section 501(b) requires the federal financial institution regulators to “establish Section 501(b) requires the federal financial institution regulators to “establish
appropriate standards for the financial institutions subject to their jurisdiction relating to appropriate standards for the financial institutions subject to their jurisdiction relating to
administrative, technical, and physical safeguard—(1) to insure the security and confidentiality of administrative, technical, and physical safeguard—(1) to insure the security and confidentiality of
consumer records and information; (2) to protect against any anticipated threats or hazards to the consumer records and information; (2) to protect against any anticipated threats or hazards to the
security or integrity of such records; and (3) to protect against unauthorized access or use of such security or integrity of such records; and (3) to protect against unauthorized access or use of such
records or information which could result in substantial harm or inconvenience to any records or information which could result in substantial harm or inconvenience to any
customer.”customer.”93
98 The CFPB does not have the authority to prescribe regulations with regard to safeguarding the The CFPB does not have the authority to prescribe regulations with regard to safeguarding the
security and confidentiality of customer records.security and confidentiality of customer records.9499 Instead, the FTC has the authority to enforce Instead, the FTC has the authority to enforce
Section 501(b) as the federal functional regulator of nonbank financial institutions, including Section 501(b) as the federal functional regulator of nonbank financial institutions, including
CRAs.CRAs.95100 The FTC has promulgated rules implementing the GLBA The FTC has promulgated rules implementing the GLBA requirement.requirement.96101 Because the Because the
FTC has little upfront supervisory or enforcement authority, the agency FTC has little upfront supervisory or enforcement authority, the agency ~~typically must rely upon~~
~~its enforcement authority after an incident has occurred. In addition, in March 2019, the~~
~~Government Accountability Office released a report that recommended actions for the FTC, the~~
~~CFPB, and Congress to strengthen oversight of credit bureaus’ data security.97 If enacted, H.R.~~

typical y must rely upon https://www.fdic.gov/regulations/examinations/credit_card/pdf_version/ch8.pdf; and Cary Collins, Keith D. Harvey, and Peter Nigro, “T he Influence of Bureau Scores, Customized Scores, and Judgmental Review on the Bank Underwriting Decision-Making Process,” Journal of Real Estate Research, vol. 24, no. 2 (2002), pp. 129-152. 95 Carrying higher levels of debt may become an equally or, under some circumstances, a more important factor in mortgage approval decisions relative to other factors in light of recently adopted mortgagemortgage approval decisions relative to other factors in light of recently adopted mortgage underwriting requirements. underwriting requirements.
SeeSee “How the New FICO“How the New FICO Score Model Will Affect Banks,” Score Model Will Affect Banks,” American Banker, August, August 13, 2014, at 13, 2014, at
http://www.americanbanker.com/issues/179_156/how-the-new-fico-score-model-will-affecthttp://www.americanbanker.com/issues/179_156/how-the-new-fico-score-model-will-affect -banks-1069413-1.html. -banks-1069413-1.html.
9196 See See Equifax, “Equifax Announces Cybersecurity Incident Involving Consumer Information,” press release, Equifax, “Equifax Announces Cybersecurity Incident Involving Consumer Information,” press release,
September 7, 2017, at https://www.equifaxsecurity2017.com/2017/09/07/equifax-announces-cybersecurity-incident-September 7, 2017, at https://www.equifaxsecurity2017.com/2017/09/07/equifax-announces-cybersecurity-incident-
involving-consumer-information/. involving-consumer-information/.
On October 2, 2017, Equifax announced that an additional 2.5 million consumers may have been affected, for a total of On October 2, 2017, Equifax announced that an additional 2.5 million consumers may have been affected, for a total of
145.5 million. See, “Equifax Announces Cybersecurity Firm has Concluded145.5 million. See, “Equifax Announces Cybersecurity Firm has Concluded Forensic Investigation of Cybersecurity Forensic Investigation of Cybersecurity
IncidentIncident ,” press release, October 2, 2017, at,” press release, October 2, 2017, at https://investor.equifax.com/news-and-events/news/2017/10-02-2017-https://investor.equifax.com/news-and-events/news/2017/10-02-2017-
213238821. 213238821.
~~92 See CRS~~ 97 See CRS Insight IN11199, Insight IN11199, Big Data in Financial Services: Privacy and Security Regulation , by Andrew, by Andrew P. Scott; P. Scott;
and CRSand CRS Report R44429, Report R44429, Financial Services and Cybersecurity: The Federal Role, by N. Eric Weiss and M. Maureen , by N. Eric Weiss and M. Maureen
Murphy. Murphy.
9398 See See 15 U.S.C.15 U.S.C. §6801 and CRS§6801 and CRS Insight IN10792, Insight IN10792, The Equifax Data Breach: An Overview and Issues for Congress, by , by
N. Eric Weiss. N. Eric Weiss.
~~94 See CRS Testimony TE10021~~99 See CRS T estimony T E10021, , Consumer Data Security and the Credit Bureaus, by Chris, by Chris Jaikaran. Jaikaran.
~~95 GLBA delegated~~ 100 GLBA delegated the authority for federal consumer privacy provisions to the federal banking regulators for federally the authority for federal consumer privacy provisions to the federal banking regulators for federally
~~insured~~ insured depository institutions; the Securities and Exchange Commission for brokers, dealers, investment companies, depository institutions; the Securities and Exchange Commission for brokers, dealers, investment companies,
and investment advisors; state insurance regulators for insurance companies; and the and investment advisors; state insurance regulators for insurance companies; and the ~~FTC~~FT C for all other financial for all other financial
institutions. See CRSinstitutions. See CRS Report R44429, Report R44429, Financial Services and Cybersecurity: The Federal Role, by N. Eric Weiss and , by N. Eric Weiss and
M. Maureen Murphy. M. Maureen Murphy.
~~96 FTC~~101 FT C, “Privacy of Consumer Financial Information,” 65, “Privacy of Consumer Financial Information,” 65 Federal Register 33646-33689, May 24, 2000. 33646-33689, May 24, 2000.
~~97 U.S. Government Accountability Office,~~ ~~Consumer Data Protection: Actions to Strengthen Oversight of Consumer~~
~~Reporting Agencies, GAO-19-196, February 2019, at https://www.gao.gov/products/GAO-19-196.~~
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~~3621 would allow~~ its enforcement authority after an incident has occurred. In addition, in March 2019, the Government Accountability Office released a report that recommended actions for the FTC, the CFPB, and Congress to strengthen oversight of credit bureaus’ data security.102 If enacted, H.R. 3621 would al ow the CFPB to supervise and enforce cybersecurity standards for credit reporting the CFPB to supervise and enforce cybersecurity standards for credit reporting
agencies.agencies.98103 If enacted, H.R. 5332 would al ow the CFPB to write rules for credit reporting agencies under the safeguards rule.104
Meanwhile, P.L. 115-174, Section 301, requires credit bureaus to provide fraud alerts for Meanwhile, P.L. 115-174, Section 301, requires credit bureaus to provide fraud alerts for
consumer files for at least a year under certain circumstances. In addition, credit bureaus must consumer files for at least a year under certain circumstances. In addition, credit bureaus must
provide consumers with one free freeze alert and one free unfreeze alert per year. The law also provide consumers with one free freeze alert and one free unfreeze alert per year. The law also
established further requirements to protect minors. Currently, many credit bureaus provide established further requirements to protect minors. Currently, many credit bureaus provide
consumers services such as credit monitoring for identity theft victims. In general, credit bureaus consumers services such as credit monitoring for identity theft victims. In general, credit bureaus
charge fees for these services, paid for by either a consumer or private company after a data charge fees for these services, paid for by either a consumer or private company after a data
breach incident. H.R. 3621 would expand protections for identity theft victims, including the right breach incident. H.R. 3621 would expand protections for identity theft victims, including the right
to free credit monitoring and identity theft services.to free credit monitoring and identity theft services.99105 It would require the CFPB to create new It would require the CFPB to create new
regulations to define the parameters for these new consumer benefits, including how long they regulations to define the parameters for these new consumer benefits, including how long they
should be provided and what services should be included.should be provided and what services should be included.~~100~~

~~98 §910 of H.R. 3621.~~
~~99 Title VIII of H.R. 3621.~~
~~100 §808 of H.R. 3621~~106 102 U.S. Government Accountability Office, Consumer Data Protection: Actions to Strengthen Oversight of Consumer Reporting Agencies, GAO-19-196, February 2019, at https://www.gao.gov/products/GAO-19-196. 103 H.R. 3621, §910. 104 H.R. 5332, §9. 105 T itle VIII of H.R. 3621. 106 H.R. 3621, §808. .
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Appendix. Natural Disasters, Government
Shutdowns, and the COVID-19 (Coronavirus
Disease 19) Pandemic
Many consumers may experience disruptions in their income following unexpected events, such Many consumers may experience disruptions in their income following unexpected events, such
as natural disasters, government shutdowns, or a pandemic and, therefore, are likely to be as natural disasters, government shutdowns, or a pandemic and, therefore, are likely to be
delinquent or default on loans and other regularly scheduled payments. For example, from delinquent or default on loans and other regularly scheduled payments. For example, from
December 22, 2018, to January 25, 2019, the federal government shut down for five weeks, December 22, 2018, to January 25, 2019, the federal government shut down for five weeks,
raising concerns that federal employees may experience difficulties meeting their scheduled raising concerns that federal employees may experience difficulties meeting their scheduled
payment obligations that might subsequently affect their credit records and future credit scores. payment obligations that might subsequently affect their credit records and future credit scores.
Likewise, a growing number of cases of Coronavirus Disease 2019 (COVID-19) were identified Likewise, a growing number of cases of Coronavirus Disease 2019 (COVID-19) were identified
in the United States during the early spring of 2020, significantly impacting many in the United States during the early spring of 2020, significantly impacting many
communities.communities.~~101~~107 As this situation rapidly evolves, the economic impact is likely As this situation rapidly evolves, the economic impact is likely to be large due to to be large due to
~~illnesses~~ il nesses, quarantines, and other business disruptions., quarantines, and other business disruptions.~~102~~108 Consequently, many Americans may lose Consequently, many Americans may lose
income and face financial hardship.income and face financial hardship.~~103~~
109 Lenders have various options to mitigate the impact on consumers’ credit scores and future credit Lenders have various options to mitigate the impact on consumers’ credit scores and future credit
access following disasters or catastrophic events. For example, furnishers may use special codes access following disasters or catastrophic events. For example, furnishers may use special codes
to report delinquencies due to special circumstances.to report delinquencies due to special circumstances.~~104~~110 Financial institutions also may agree to Financial institutions also may agree to
limit late or other fees. Lenders offer forbearance plans, which are agreements that limit late or other fees. Lenders offer forbearance plans, which are agreements that ~~allow~~al ow
extended time for consumers to become current on their payments. However, some of these extended time for consumers to become current on their payments. However, some of these
efforts may be more difficult for some institutions if they require changes in credit contracts. If efforts may be more difficult for some institutions if they require changes in credit contracts. If
lenders and consumers enter into loan forbearance agreements, then furnishers have the option to lenders and consumers enter into loan forbearance agreements, then furnishers have the option to
report to the credit bureaus that these consumers are current on their credit obligations. report to the credit bureaus that these consumers are current on their credit obligations.
Congress has also responded to mitigate the financial consequences of an adverse event on Congress has also responded to mitigate the financial consequences of an adverse event on
consumers. For example, various consumers. For example, various ~~bills~~bil s were introduced during the federal shutdown to were introduced during the federal shutdown to ~~allow~~al ow
credit restoration for some affected consumers.credit restoration for some affected consumers.~~105~~111 In addition, on March 27, 2020, in response to In addition, on March 27, 2020, in response to
the COVID-19 pandemic, the President signed the Coronavirus Aid, Relief, and Economic the COVID-19 pandemic, the President signed the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act; P.L. 116-136).Security Act (CARES Act; P.L. 116-136).~~106~~112 Section 4021 of this Section 4021 of this ~~bill~~ bil requires furnishers during requires furnishers during
the COVID-19 pandemic covered period to report to the credit bureaus that consumers are current the COVID-19 pandemic covered period to report to the credit bureaus that consumers are current
on their credit obligations if they enter into an agreement to defer, forbear, modify, make partial on their credit obligations if they enter into an agreement to defer, forbear, modify, make partial
payments, or get any other assistance on their loan payments from a financial institution and fulfil payments, or get any other assistance on their loan payments from a financial institution and fulfil

~~101~~ 107 For background For background on COVID-19on COVID-19 (Coronavirus Disease(Coronavirus Disease 2019), see CRS2019), see CRS In FocusIn Focus IF11421, IF11421, COVID-19: Global
~~Implications~~Im plications and Responses, by Sara, by Sara ~~M. Tharakan~~ M. T harakan et al. et al.
~~102~~108 For more information on the effects of COVID-19 on the U.S. For more information on the effects of COVID-19 on the U.S. economy, see CRSeconomy, see CRS Insight IN11235, Insight IN11235, COVID-19:
Potential ~~Economic~~Econom ic Effects, by Marc Labonte. , by Marc Labonte.
~~103~~109 For more information on financial industry policy issues For more information on financial industry policy issues ~~during~~ during the COVID-19 outbreak for consumers having the COVID-19 outbreak for consumers having
trouble paying their bills,trouble paying their bills, see CRSsee CRS Insight IN11244, Insight IN11244, COVID-19: The Financial Industry and ~~Consumers~~Consum ers Struggling to
Pay Bills,, by Cheryl R. Cooper. by Cheryl R. Cooper.
~~104~~110 During natural disasters, lenders have the ability to flag affected borrowers During natural disasters, lenders have the ability to flag affected borrowers by usingby using special comment codes when special comment codes when
reporting to credit bureaus.reporting to credit bureaus. ~~See~~ See CFPB, CFPB, Natural Disasters and Credit Reporting: Quarterly ~~Consumer~~Consum er Credit Trends, ,
November 2018, https://files.consumerfinance.gov/f/documents/bcfp_quarterly-consumer-credit-trends_report_2018-November 2018, https://files.consumerfinance.gov/f/documents/bcfp_quarterly-consumer-credit-trends_report_2018-
11_natural-disaster-reporting.pdf. 11_natural-disaster-reporting.pdf.
~~105~~111 For example, H.R. 935, H.R. 799, H.R. 1286, and S. For example, H.R. 935, H.R. 799, H.R. 1286, and S. 535. House Financial Services535. House Financial Services Committee Chairwoman Committee Chairwoman
Maxine Waters also released a related draft bill, “Protecting Innocent Consumers Affected by a ShutdownMaxine Waters also released a related draft bill, “Protecting Innocent Consumers Affected by a Shutdown Act.”Act.”
~~106~~ 112 CRSCRS Report R46301, Report R46301, Title IV Provisions of the CARES Act (P.L. 116-136), coordinated by Andrew P. Scott, coordinated by Andrew P. Scott ..
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those requirements, provided they were current before this period. those requirements, provided they were current before this period.~~107~~113 The covered period starts on The covered period starts on
January 31, 2020, and extends to the later of 120 days after enactment or 120 days after the January 31, 2020, and extends to the later of 120 days after enactment or 120 days after the
national emergency declared by the President on March 13, 2020, terminates. In other words, national emergency declared by the President on March 13, 2020, terminates. In other words,
prior to the CARES Act lenders could choose whether to report loans in forbearance as paid on prior to the CARES Act lenders could choose whether to report loans in forbearance as paid on
time. Under the CARES Act, lenders must report such obligations as paid on time. However, time. Under the CARES Act, lenders must report such obligations as paid on time. However,
some affected consumers may some affected consumers may ~~still~~ stil experience harm to their credit record because lenders experience harm to their credit record because lenders
~~generally can still~~ general y can stil choose whether to enter into an assistance agreement with an individual choose whether to enter into an assistance agreement with an individual
consumer.consumer.
The CARES Act grants The CARES Act grants ~~all~~ al consumers a right to request forbearance for many types of consumers a right to request forbearance for many types of
~~mortgages108~~mortgages114 and for federal student loans. and for federal student loans.~~109~~115 In addition, financial regulators have encouraged In addition, financial regulators have encouraged
lenders to work with consumers affected by the outbreak,lenders to work with consumers affected by the outbreak,~~110~~116 and many financial institutions have and many financial institutions have
announced efforts to provide assistance to affected consumers.announced efforts to provide assistance to affected consumers.~~111~~117 However, for many types of However, for many types of
consumer loans, such as auto loans and credit cards, different financial institutions may be subject consumer loans, such as auto loans and credit cards, different financial institutions may be subject
to different laws and incentives to handle consumer relief requests.to different laws and incentives to handle consumer relief requests.~~112~~118 Therefore, a consumer’s Therefore, a consumer’s
~~ability~~ ability to access loan forbearance may vary, and some consumers may to access loan forbearance may vary, and some consumers may ~~still~~ stil experience harm to experience harm to
their credit record. their credit record.
On May 15, 2020, the House passed the HEROES Act (H.R. 6800). Section 110401 of the On May 15, 2020, the House passed the HEROES Act (H.R. 6800). Section 110401 of the ~~bill~~
bil would create a moratorium on furnishing adverse information to credit bureaus during the would create a moratorium on furnishing adverse information to credit bureaus during the
COVID-19 pandemic and for 120 days afterward, as COVID-19 pandemic and for 120 days afterward, as ~~well~~ wel as for other future major natural as for other future major natural
disasters.disasters.~~113~~119 Consumers could request to delete adverse information during the covered period and Consumers could request to delete adverse information during the covered period and
for 270 days afterward if experiencing economic hardship. Medical debt related to treatments for 270 days afterward if experiencing economic hardship. Medical debt related to treatments
arising from COVID-19 or another major disaster would not be furnished or included in the credit arising from COVID-19 or another major disaster would not be furnished or included in the credit

~~107~~ 113 If the consumer was If the consumer was delinquent before the covered period, then the furnisher should maintain the delinquent status delinquent before the covered period, then the furnisher should maintain the delinquent status
unlessunless the consumer bringsthe consumer brings the account or obligation current. For more information, see CFPB, the account or obligation current. For more information, see CFPB, ~~Statement~~Statem ent on
Supervisory and ~~Enforcement~~Enforcem ent Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the
CARES Act, April 1, 2020, at https://files.consumerfinance.gov/f/documents/cfpb_credit, April 1, 2020, at https://files.consumerfinance.gov/f/documents/cfpb_credit -reporting-policy--reporting-policy-
statement_cares-act_2020-04.pdf. statement_cares-act_2020-04.pdf.
~~108~~114 §4022 gives consumers the right to request a forbearance and provides a moratorium on foreclosures on loans that §4022 gives consumers the right to request a forbearance and provides a moratorium on foreclosures on loans that
are either (1) insured or guaranteed underare either (1) insured or guaranteed under provisions of the National Housing Act (12 U.S.C.provisions of the National Housing Act (12 U.S.C. §1707 et seq., 12. U.S.C. §1707 et seq., 12. U.S.C.
§1715z-20); (2) guaranteed under §184 or §184A of the §1715z-20); (2) guaranteed under §184 or §184A of the ~~Housing~~ Ho using and Community Development Act (12 U.S.C. and Community Development Act (12 U.S.C.
§1715z-13a, §1715z-13b); (3) guaranteed or insured by the Department of Veterans Affairs or (including§1715z-13a, §1715z-13b); (3) guaranteed or insured by the Department of Veterans Affairs or (including those made those made
by) Department of Agriculture; or (4) purchased or securitizedby) Department of Agriculture; or (4) purchased or securitized by Freddieby Freddie Mac or Fannie Mae. Mac or Fannie Mae.
~~109~~115 §3513 suspends §3513 suspends all payments due for loans made under part D and part B (that are held by the Department of all payments due for loans made under part D and part B (that are held by the Department of
Education) of title IV of the Higher Education Act of 1965 ( 20 U.S.C.Education) of title IV of the Higher Education Act of 1965 ( 20 U.S.C. §1087a et seq.; §1071 et seq.)§1087a et seq.; §1071 et seq.) through through
September 30, 2020. Any payment that September 30, 2020. Any payment that ~~has~~h as been suspended been suspended ~~will be~~ will be treated as if it weretreated as if it were a regularlya regularly ~~scheduled~~ scheduled payment payment
made by a borrower for the purpose of reporting information about the loan to a consumer reporting agency.made by a borrower for the purpose of reporting information about the loan to a consumer reporting agency.
~~110~~ 116 On Monday, March 9, federal and state financial regulators coordinated a statement to the financial industry, On Monday, March 9, federal and state financial regulators coordinated a statement to the financial industry,
encouraging it to help meet the needs of consumers impacted by the coronavirus outbreak. encouraging it to help meet the needs of consumers impacted by the coronavirus outbreak. ~~They~~T hey stated that “financial stated that “financial
institutions should work constructively with borrowers and other consumers in affected communities,” as long as they institutions should work constructively with borrowers and other consumers in affected communities,” as long as they
take “prudent efforts that are consistent with safe and sound lendingtake “prudent efforts that are consistent with safe and sound lending practices.” Seepractices.” See Federal Reserve BoardFederal Reserve Board et al., et al.,
Agencies Encourage Financial Institutions to Meet Financial Needs of ~~Customers and Members~~Custom ers and Mem bers Affected by
Coronavirus, March 9, 2020, at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200309a.htm. , March 9, 2020, at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200309a.htm.
~~111~~117 Jessica Jessica Menton, “Contact Your Mortgage Lender: Payments May Be Deferred as Coronavirus Pandemic Causes Menton, “Contact Your Mortgage Lender: Payments May Be Deferred as Coronavirus Pandemic Causes
Worker Hardships,” Worker Hardships,” USA Today, March 22, 2020, at https://www.usatoday.com/story/money/2020/03/20/coronavirus-, March 22, 2020, at https://www.usatoday.com/story/money/2020/03/20/coronavirus-
mortgage-payments-may-deferred-amid-pandemic/5073179002/. mortgage-payments-may-deferred-amid-pandemic/5073179002/.
~~112~~118 For more information on consumer loan forbearance during the COVID-19 pandemic, including For more information on consumer loan forbearance during the COVID-19 pandemic, including the impact of the the impact of the
CARESCARES Act and other federal regulatory efforts, see CRSAct and other federal regulatory efforts, see CRS Report R46356, Report R46356, COVID 19: ~~Consumer~~Consum er Loan Forbearance
and Other Relief Options, coordinated by Cheryl R., coordinated by Cheryl R. Cooper. Cooper.
~~113~~119 For more information on HEROES Act consumer loan provisions, see CRS For more information on HEROES Act consumer loan provisions, see CRS Insight IN11405, Insight IN11405, HEROES Act (H.R.
6800): Selected ~~Consumer~~Consum er Loan Provisions, by Cheryl R. Cooper. , by Cheryl R. Cooper.
Congressional Research Service Congressional Research Service

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Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues

report. New credit scoring models could not be implemented during a major natural disaster report. New credit scoring models could not be implemented during a major natural disaster
period if they would identify a significant percentage of consumers as being less creditworthy period if they would identify a significant percentage of consumers as being less creditworthy
than the previous model. Although these provisions would protect consumers from lower credit than the previous model. Although these provisions would protect consumers from lower credit
scores during the COVID-19 pandemic, the removal of information may also reduce credit scores during the COVID-19 pandemic, the removal of information may also reduce credit
scores’ predictability in the future, which could harm some consumers in the long term.scores’ predictability in the future, which could harm some consumers in the long term.~~114~~
120

Author Information

Cheryl R. Cooper Cheryl R. Cooper
Darryl E. Getter Darryl E. Getter
Analyst in Financial Economics Analyst in Financial Economics
Specialist in Financial Economics Specialist in Financial Economics

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should under the direction of Congress. Information in a CRS Report should ~~not~~n ot be relied upon for purposes other be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
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copy or otherwise use copyrighted material. copy or otherwise use copyrighted material.

~~114~~ 120 For more information about the policy options and consequences of different credit reporting approaches during the For more information about the policy options and consequences of different credit reporting approaches during the
COVID-19 pandemic, see FinRegLab,COVID-19 pandemic, see FinRegLab, Disaster-Related Credit Reporting Options, May 2020, https://finreglab.org/wp-, May 2020, https://finreglab.org/wp-
content/uploads/2020/05/FinRegLab-Disaster-Related-Credit-Reporting.pdf. content/uploads/2020/05/FinRegLab-Disaster-Related-Credit-Reporting.pdf.
Congressional Research Service Congressional Research Service
R44125 R44125 · VERSION 1516 · UPDATED
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