First published April 2019
America’s credit reporting system is controlled by 3 big, for-profit companies—Experian, Transunion, and Equifax—which collect lending and payment data on 220 million Americans. They collect this data without consumers’ permission or approval, there is no way for consumers to opt out, and consumers must pay to access their own scores.
- Credit reports and scores directly impact Americans’ economic security and opportunity—they affect the way Americans are treated by lenders, landlords, utility companies, hospitals, and employers.
- Errors are common and difficult to correct, and people of color experience higher error rates than white households.
- Misuses of credit history are prevalent and harmful: Job seekers can be denied work, people pay higher car insurance rates because they struggle with medical bills, and the Trump administration has even proposed using credit history to determine whether immigrants should be eligible for permanent residency.
- The credit reporting system is built on deep racial inequities—and it operates in ways that make them worse. Generations of discrimination in employment, lending, education, and housing have produced significant racial disparities in credit history. As a result, decisions drawing on credit data reproduce and spread existing racial inequality.