U.S. PIRG Consumer Blog: Credit scoring models may deny consumers who take advantage of legal rights

We're asking Congress and the FTC to investigate reports first broken by Evan Hendricks and his Privacy Times newsletter that, as professor Brian Wolfman notes in his Public Citizen Law and Policy blog entry, "the fact that a consumer has disputed her credit report can undermine her ability to get a home loan, even when the consumer was correct in the dispute."

As Ken Harney, a syndicated columnist and longtime critic of credit scoring and reporting mistakes explains in his Washington Post followup to Privacy Times:

Fannie Mae's automated underwriting system won't accept any application in which there is a notation in the credit report that a consumer has disputed an account or "tradeline." [...] Evan Hendricks, author of the book "Credit Scores and Credit Reports" and publisher of Privacy Times, a newsletter that outlined Fannie Mae's policy in a recent report, calls it "extremely unfair to honest consumers who are simply doing what they should -- challenging misinformation."

We agree. Consumers should not be harmed by exercising legal rights granted by Congress to dispute their notoriously inaccurate credit reports.