Credit institutions cannot tell my sister and me apart

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My twin sister Alita and I have a credit problem: not because we defaulted on loans or skipped accounts, but because the American rating agencies can’t 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 The edge, my background check turned up my name as Alita Clark; Mitchell Clark was listed as an alias. Alita and I have been turned down over and over again for credit cards, despite both of us having good credit. I was turned down for a car loan by a bank that I took advantage of for years – despite having enough money to pay off the loan immediately. Neither of us have had any problems accessing housing, but it is difficult to know for sure that this will not happen in the future. The problem is not the banks or lenders, but the credit system itself, a huge and invisible information network with little incentive to solve even the simplest of problems.

Of course I gave Vox Media my SSN, not my sister’s. She still showed up.

If a single agency or company were wrong I might set the record straight, but the credit system is a jumble of overlapping forces so tightly woven that it can be difficult to tell which part of the system the wrong. 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 that supposedly indicates how reliably you repay lenders – but these three companies draw on hundreds of data sources to arrive at that number. As you can imagine, when you collect tons of data on almost every adult in the country, mistakes happen.

In theory, consumers should appeal when the credit system makes a mistake. Each agency has its own dispute resolution procedure, with its own standard of documentation and evidence. Lenders, the companies that provide information to credit reporting agencies, are also required to accept and investigate disputes. If those methods don’t work, consumers can file a complaint with the Consumer Financial Protection Bureau (CFPB), which then forwards it to the appropriate rating agency.

But in practice, those studies are anything but thorough. A 2012 CFPB study how the rating agencies manage data, it was found that they turn 85 percent of disputes over to their suppliers – often without any evidence that consumers have included to substantiate their complaints. Often times, by the time a bug is resolved, it spreads to another desk and the whole process has to start over. The distributed nature of the system makes it impossible to place responsibility for a fault on a single party, or to make anyone responsible for resolving it.

In many cases, such as mixed files or in cases of identity theft, the best thing about the credit bureaus would be to know if information was incorrect, says Evan Hendricks, a credit reporting proponent who literally wrote the book about credit scores and how the system can go wrong. ‘But they don’t care. Because the creditors order them to hold it, they hold it. He says it “was the basic business model of the credit bureaus to record faithfully on your credit report what creditors provide and to keep it true to the instructions of further creditors as soon as you dispute it.”

I figured this out the hard way. As of 2017, I picked up my reports from all three agencies, hoping to find out which ones listed me as Alita and how to fix this. Since the system was already too confused for fact-based verification to work (I’m often asked about student loans or car loans that I’ve never heard of), I had to send in a physical copy of my Social Security card and the driver’s. license and then wait for the reports to arrive by mail. Experian seemed to get everything right, but Equifax had my SSN listed as my sister’s. TransUnion had the correct Social Security number, but my name was listed as Alita Clark.

I filed disputes and sent copies of my Social Security card, driver’s license, and birth certificate. When I came back a few months later, it looked like the fixes had worked for the most part. My TransUnion report had my name and SSN, although Alita appeared as an alias. Equifax got my information right too, but it says I was “previously” known as Alita. Both had my correct credit history. So far good enough.

In 2019, I applied for Apple’s new credit card and wanted to try it as soon as it came out. My application was declined, and after some digging, I realized it was probably handled by TransUnion. I asked them for a report and got a response back 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 that I couldn’t get 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 resolved. I finally got my Apple Card and even regained access to my credit report through online channels. But it was only a matter of time before the entropy came back in. I was turned down for a car loan late last year and today can’t access my TransUnion or Equifax reports online again. If I ever want to get a mortgage, I will probably have to get a lawyer.

For her part, my sister says she feels like “a ghost in the shell.” A credit bureau replied to her correction request (including her Social Security card and driver’s license) with a letter saying they couldn’t fix it – which was addressed to Mitchell. “Obviously they weren’t even looking, so why would I try again,” she told me. As for the reports she was able to get back after they were supposedly corrected, they were ‘a bizarre Frankenstein’ of our credit history: in addition to some of her real accounts, there are auto insurance company credit withdrawals I’ve looked at, and even one of my local hospital – neither of which appeared in any of my reports.

To sum up her feelings she sent me this.

Errors Mitchell Discovered When Requesting His Credit Reports (NR = No Report Requested That Year)

Year Equifax Experian TransUnion
Year Equifax Experian TransUnion
2016 NO NO Alita listed as main identity
2017 Alita’s SSN listed with Mitchell’s information Nothing visibly wrong, no SSN shown NO
2018 Mitchell listed as “previously known as Alita” NO Alita listed as an alias
2019 NO NO Alita listed as main identity
2021 Currently awaiting report by mail Alita’s SSN listed with Mitchell’s information Currently awaiting report by mail

You rarely hear about these problems, but they are surprisingly common – and not just for twins. People can be pronounced dead by credit agencies, put 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 three major agencies. About 26 percent of the study participants found incorrect information in at least one of their reports. In 2015, the FTC adopted a follow-up investigation asked 121 consumers to investigate unresolved disputes – and nearly 70 percent of them believed their mistakes had still not been corrected. There have been congressional hearings, lawsuits with regulators and decades of political pressure, but the system simply refuses to shape.

Work has been done to make the credit reporting process more visible to the general public – in 2014 the CFPB called on credit card companies to give their customers free access to their credit scores, and now many do, with some even giving non-cardholders free access to their score. This allows consumers to keep an eye on their credit, giving them a warning that something has gone wrong if it appears lower than it should or if there is a sudden change.

But that is really just the first step. If you notice a discrepancy in your credit report, it could just be the start of a long, drawn-out battle with one or more credit rating agencies. Even if victims sue authorities and win, the damage isn’t great enough to encourage better behavior. Hendricks tells me that even when cases end with high punitive damages against the credit rating agencies, they tend to be reduced. “[T]they achieve their goal of punishing the company and, more importantly, not continuing the same behavior, ”he says. “So basically they just weren’t hit hard enough to change.”

Alita and I both have credit cards in our name; I only got one as part of the writing of this article. Although my principal bank wouldn’t give me a car loan, I was able to get one through the dealer’s bank, a local credit union. I was also able to pass the credit check somehow pulled through my new apartment complex.

But we are both lucky, in many ways. First, neither of us causes problems for each other. My sister is even more financially responsible than I am, and she’s never had any legal problems. But if she defaulted on a loan, would that show in my reports? If I went to jail, would it prevent her from ever getting a job? Frankly, we don’t know. The answer may actually be “it depends what kind of credit reporting agency you are asking”.

But there are those for whom these kinds of problems can be devastating. It’s not hard to imagine a situation where someone finds themselves in troubled times looking for a lifeline in the form of credit, and then finds out they don’t qualify because of some bureaucratic snafu. As the system currently stands, we have three companies that have a tremendous amount of control and little meaningful oversight. Until some regulator acts, the confusion of the system can only get worse.