Credit reporting and my experience with Experian

Last week was rough for the credit reporting agencies. 60 Minutes took advantage of this FTC report released on 2/11/13. According to the FTC, this report

“…is the first major study that looks at all the primary groups that participate in the credit reporting and scoring process: consumers; lenders/data furnishers (which include creditors, lenders, debt collection agencies, and the court system); the Fair Isaac Corporation, which develops FICO credit scores; and the national credit reporting agencies (CRAs)”

In this coverage, 60 Minutes chose to portray the credit reporting agencies as villains solely responsible for credit reporting inaccuracies. Yet 60 Minutes failed to lead with, or effectively report the opening paragraph on the FTC website I quoted above identifying all the participants in the credit reporting and scoring process responsible for working together to improve the accuracy of our credit reports and credit scores.

Credit reporting agencies aggregate data. Lenders are responsible for providing accurate data, and consumers are responsible for checking their credit reports once a year for free to make sure the data being reported is accurate. But less than 25% of Americans check their credit report each year.

So I find the most alarming statistic is that 75% of us are not doing our part in the process. Alarming, but not surprising as students from 46 states continue to graduate without an adequate financial education. Checking your credit report for free once a year is just one anecdote of information included in quality financial education curricula.

As you can watch in this FOX interview, credit expert John Ulzheimer agrees that consumers “…have to become way more engaged in our credit reports.” By the way, if you go to annualcreditreport.com and do find an error and need to dispute it, the Consumer Financial Protection Bureau wrote this very easy to understand article that can help you.

To be clear, accurate credit reporting is a collective effort. The lenders, the reporting agencies, and the consumers need to work together to improve because according to the FTC, five percent of consumers had errors on their credit reports that could result in less favorable terms for loans.

The FTC and John Ulzheimer aren’t alone in telling consumers to check their credit reports once a year for free. Experian has been doing it for years in a number of ways. As it relates to my particular passion, Experian recognizes that consumer engagement in the process needs to begin with education.

Here is a little bit about my experience with Experian…

Experian is a national leader in financial education. Experian’s education arm are led by Maxine Sweet and Rod Griffin, each passionate and genuine people dedicated to bringing financial education to life in our schools. They are leaders who go far beyond their job descriptions.

• Experian had the courage and vision to be with Jump$tart as a partner since the beginning. Jump$tart is a national coalition of organizations dedicated to improving the financial literacy of pre-kindergarten through college-age youth by providing advocacy, research, standards and educational resources. Jump$tart strives to prepare youth for life-long successful financial decision-making. I am strong personal advocate of Jump$tart and their mission.

• Experian is a major sponsor in Jump$tart’s National Educator Conference, which I attend every year with hundreds of other educators. At their conference teachers are treated like royalty. The facilities and food are first class, the professional development is meaningful, and most of the resources we can take home are free.

• Experian presents each year at the conference. This year they were the first group to present in a Twitter Town Hall format. By the way, they always bring up the importance of checking your credit report once a year for free.

• Experian helped fund My Money Checkup, which was built by the National Foundation for Credit Counselors. A matter of fact, I just blogged about how valuable this service is. You can read my post here.

• Experian helped fund and build LifeSmarts. LifeSmarts develops the consumer and marketplace knowledge and skills of teenagers through competition and rewards, and is primarily used by my FCCLA friends.

• Experian works with FEFE, who provides a number of terrific educational resources such as turn key lessons, webinars, and training.

• Experian’s credit education blog is a great resource for students and consumers.

• On a number of occasions Rod Griffin has taken the time to Skype with my classroom to help my students better understand the credit reporting process. Each time Rod begins the Skype by stressing the importance of checking your credit report for free once a year.

The FTC report did raise some flags, but it is a systemic problem. I hope it causes the media to look deeper into a broader problem of how our education system continues to neglect the financial education needs of consumers in our modern society.