Here, in an article by AnnaMaria Andriotis, an excellent reporter on consumer protection issues (behind paywall). The practice, known as credit washing, often leads to temporary removal of the damaging item from the consumer's credit report, and a correspondingly evanescent improvement in the consumer's credit score. Excerpt:
Credit washing has slowed down the process of getting loans at some banks while lenders look for other ways to evaluate potential borrowers. It has added to questions about how useful credit scores really are and eroded banks’ confidence in the credit-reporting system they have relied on for decades.
Equifax, Experian and TransUnion get millions of letters each year that allege errors on credit reports, many claiming identity theft, according to people familiar with the matter. It isn’t known how many are illegitimate claims. Sometimes the companies receive batches of similar letters claiming identity theft or other issues at once—mailed from the same ZIP Code on the same date, some with the same typos, according to the people and documents reviewed by The Wall Street Journal.
