My twin sister Alita and I have a credit problem: not because we’ve defaulted on loans or skipped bills, but because the US credit rating agencies can’t seem to tell us apart. Sometimes they associate her name with my social security number, sometimes it’s the other way around — and sometimes we both show up under the same SSN.
When I applied to work at The Verge, my background check gave my name as Alita Clark; Mitchell Clark was listed as an alias. Over and over, Alita and I have been rejected for credit cards, despite both having good credit. I was rejected for a car loan by a bank that I’ve used for years — despite having enough cash to immediately pay off the loan. Neither of us has had issues with getting access to housing, but it’s hard to feel sure it won’t happen in the future. The problem isn’t banks or lenders but the credit system itself, a vast and invisible information network with little incentive to correct even the simplest of problems.
If it were a single agency or company getting it wrong, I might be able to set the record straight, but the credit system is a thicket of overlapping forces, so densely woven that it can be hard to tell which part of the system is making the mistake. In the US, three companies keep track of almost everyone’s credit history: Equifax, TransUnion, and Experian. Most people will be familiar with their credit score — a number supposedly reflecting how reliably you pay back lenders — but these three companies draw on hundreds of data sources to come up with that number. As you can imagine, when you’re collecting tons of data on almost every adult in the country, mistakes happen.
In theory, consumers are supposed to have some recourse when the credit system screws up. Each agency has its own dispute process, with its own standard of documentation and evidence. Credit furnishers, the companies providing the credit reporting agencies with information, are also required to accept and investigate disputes. If those methods fail, consumers can file a complaint with the Consumer Financial Protection Bureau (CFPB), which will then forward it to the appropriate ratings agency.
But in practice, those investigations are anything but thorough. A 2012 CFPB investigation into how the credit ratings agencies manage data found that they hand off 85 percent of disputes to their furnishers — often without any of the evidence that consumers have included to back up their complaints. A lot of the time, by the time a mistake is resolved, it’s spread to another agency and the whole process has to begin again. The distributed nature of the system makes it impossible to pin responsibility for a mistake to any single party, or make anyone responsible for fixing it.
In lots of cases, such as mixed files or in cases of identity theft, the credit bureaus would be in the best position to know if information was incorrect, says Evan Hendricks, a credit reporting advocate who literally wrote the book on credit scores and how the system can go wrong. “But they don’t care. Because of the creditors instructing them to keep it on, they keep it on.” He says it was “the fundamental business model of the credit bureaus to faithfully put on your credit report what creditors furnish and to faithfully keep it on further creditors’ instructions once you dispute it.”
I found this out the hard way. Starting in 2017, I pulled my reports from all three agencies, hoping to figure out which ones had me listed as Alita and how to fix it. Since the system was already too mixed up for fact-based verification to work (I’m often asked about student or car loans that I’ve never heard of), I had to mail in a physical copy of my social security card and driver’s license, then wait for the reports to arrive by mail. Experian seemed to have everything right, but Equifax had my SSN listed as my sister’s. TransUnion had the right social security number, but my name was listed as Alita Clark.
I filed disputes, sending copies of my social security card, driver’s license, and birth certificate. When I checked back a few months later, it seemed like the fixes had mostly worked. My TransUnion report had my name and SSN, though Alita showed up as an alias. Equifax also had my information right, but it says I was “formerly known” as Alita. Both had my correct credit history. So far, so good enough.
In 2019, I applied for Apple’s new credit card, wanting to try it as soon as it came out. My application was denied, and after some digging, I realized it was likely being handled by TransUnion. I requested a report from them and got back a reply addressed to, you guessed it, Alita Clark. After months of working to fix the errors in my reports, they had crept back in — and someone else’s mistake was keeping me from getting Apple’s shiny new credit card.
My sister and I both filed complaints with the CFPB, and for a while, the situation seemed to be fixed. I finally got my Apple Card and was even able to access my credit report through online channels again. But it was only a matter of time before entropy slipped back in. I was rejected for a car loan late last year, and today I’m back to not being able to access my TransUnion or Equifax reports online. If I ever want to get a mortgage, I’ll likely have to get a lawyer involved.
For her part, my sister says she feels like “a ghost in the shell.” One credit bureau replied to her correction request (which included her social security card and driver’s license) with a letter saying they couldn’t fix it — which was addressed to Mitchell. “Clearly, they didn’t even look so why should I try again,” she told me. As for the reports she was able to get back after they had supposedly been corrected, they were “a bizarre Frankenstein” of our credit histories: alongside some of her real accounts, there are credit pulls from car insurance agencies I looked into, and even one from my local hospital — neither of which have shown up on any of my reports.
To sum up her feelings, she sent me this.
Errors Mitchell found when requesting his credit reports (NR = No report requested that year)
|2016||NR||NR||Alita listed as main identity|
|2017||Alita’s SSN listed with Mitchell’s information||Nothing visibly wrong, no SSN shown||NR|
|2018||Mitchell listed as "Formerly known as Alita"||NR||Alita listed as an alias|
|2019||NR||NR||Alita listed as main identity|
|2021||Currently awaiting report in mail||Alita’s SSN listed with Mitchell’s information||Currently awaiting report in mail|
You rarely hear about these issues, but they’re surprisingly common — and not just for twins. People can be declared dead by credit agencies, get stuck in limbo after a name change, or just slip through the cracks. In 2012, the FTC asked 1,001 consumers to request credit reports from the big three agencies. Roughly 26 percent of the study participants found incorrect information on at least one of their reports. In 2015, the FTC in a follow-up study asked 121 consumers to examine unresolved disputes — and almost 70 percent of them believed that their errors still hadn’t been corrected. There have been congressional hearings, lawsuits with regulators, and decades of political pressure, but the system simply refuses to shape up.
There has been work done to make the credit reporting process more visible to the general public — in 2014, the CFPB called on credit card companies to start providing their customers with free access to their credit scores, and now many do, with some even letting non-cardholders access their score for free. This lets consumers keep an eye on their credit score, which could give them a warning that something’s gone wrong if it seems lower than it should be or if there’s a sudden change.
But that’s really only a first step. If you noticed a discrepancy on your credit report, that could just be the start of a long, drawn-out fight with one or more credit reporting agencies. Even when victims sue agencies and win, the damages aren’t great enough to incentivize better behavior. Hendricks tells me that even when cases end up with large punitive damages against the credit reporting agencies, they tend to get reduced. “[T]hey don’t achieve their purpose of punishing the company and more importantly deterring from continuing the same conduct,” he says. “So basically, they just haven’t been spanked hard enough to change.”
Alita and I both actually have credit cards in our names; I just got one as part of writing this article. While my main bank wouldn’t give me an auto loan, I was able to get one through the dealership’s bank, a local credit union. I was also able to pass the credit check that my new apartment complex pulled, somehow.
But we’re both lucky, in many ways. First, neither of us is causing trouble for each other. My sister’s even more financially responsible than I am, and she’s never been in any sort of legal trouble. But if she did default on a loan, would that show up on any of my reports? If I went to jail, would that prevent her from getting a job at some point? Quite honestly, we don’t know. The answer may actually be “it depends on what credit reporting agency you ask.”
But there are people for whom this kind of issue could be devastating. It’s not hard to imagine a situation where someone falls on hard times and is looking for a lifeline in the form of credit, and then discovers that they’re ineligible, due to some bureaucratic snafu. As the system currently stands, we have three companies that have a vast amount of control and little meaningful oversight. Until some sort of regulatory power steps in, the tangle of the system may only get worse.