Lenders use the score as a snapshot of whether you are likely to be able to repay a loan. The results can also be reviewed when you apply for a job or a rental agreement. The higher the score, the better. If you pay your bills on time and keep your credit card balance low, you can get higher scores.
Due to the complexity of the credit reporting system, consumers may feel hampered when they find a bug and try to fix it.
For example, in December a student borrower in California complained about a 200 point drop in creditworthiness due to “incorrect” information reported by a student loan service provider. The servicer said he had not reported any inaccurate information and referred the borrower to the credit bureaus. The decline in creditworthiness prevented the borrower from taking steps such as moving and buying a car, but “no one seems to be helping fix the problem,” the borrower wrote. “My credit score continues to drop after trying so hard to get it back up.”
A similar situation is the subject of a lawsuit, cited by Consumer Reports, by a New Jersey woman last summer in the Federal District Court against Equifax, TransUnion and VantageScore. The complaint states that their student loan service provider Navient mistakenly reported their payments as late when they should have been reported as up-to-date under the federal assistance program. The bug caused their creditworthiness to drop by nearly 100 points, the complaint said.
Apr. 19, 2021, 5:25 p.m. ET
Navient, who is not a defendant in the lawsuit, has corrected the mistake, but the credit bureaus haven’t updated their credit ratings to reflect the change, the lawsuit says.
The complaint alleges that “thousands” of borrowers are in a similar situation, although a borrower’s attorney, Philip L. Fraietta of Bursor & Fisher in New York, said the number was an estimate.
A Navient spokesman, Paul Hartwick, declined to comment on the lawsuit.
During the pandemic, Navient is reporting student loan payment status in accordance with instructions from the Federal Ministry of Education, he said. “If you have any questions about a particular credit score, please contact the company that issued it,” Navient advised borrowers.