The Consumer Financial Protection Bureau (CFPB) released a report on Nov. 2, 2021, addressing credit report disputes. Among other things, the report found individuals who live in majority Black or Hispanic neighborhoods, as well as those who are low income or have low credit scores, are more likely than those in majority white areas or those who are high income to have credit report disputes.

In the report, the CFPB focused on auto loans, general credit cards, retail cards and student loans opened between 2012 and 2019. These focus areas were separated into demographics categories, such as age, type of account, race and ethnicity, and timing of disputes. Within these categories, the CFPB found credit report disputes were much more common for accounts with already lower credit scores and income levels, and accounts opened in majority Black and Hispanic neighborhoods were more likely to have dispute flags, especially for credit cards and auto loans.

Outcomes for these dispute flags vary wildly across the type of credit they arise from. Auto loans have about a 40% closure rate, with the dispute flag still existing within four years of a dispute. The CFPB states this could be due to the shorter term of auto loans or the problem of inconsistent payment information. Student loans are often ultimately deleted, with student loan accounts with dispute flags being 30% more likely to be deleted than accounts without flags. Again, the CFPB states  this reporting could be due to accounts being attributed to the wrong customer or inconsistent reporting. Despite the potential for inconsistent reporting on accounts, the data suggests these types of accounts suffer from disputes more often than credit cards or retail cards.

The CFPB notes the research findings could be attributed to other factors, like accounts linked to the incorrect individual or that these disparities may be a symptom of generally low credit scores, which happened to be more prevalent in the regions addressed. With this information, more research can be done regarding the increasing number of dispute flags and what kind of reporting would be more accurate to ensure customers have the correct credit score.

To learn more about this topic, contact Doeren Mayhew’s regulatory compliance specialists.


John Zasada, JD, CAMS – Regulatory Consulting Director, Financial Institutions Group

Haley Matson – Intern, Financial Institutions Group