Pod Insights The Clark Howard Podcast 03.30.26 The Credit Bureaus: Errors & Apathy / Sticker Shock: New Smart Phones About this episode It’s always been important to monitor your credit reports, and now - more so. The number of inaccuracy complaints is up dramatically, and such mistakes can impede your ability to buy a home, get a car, or even land a job. Clark shares the latest research on how the bureaus are responding (or not) and offers direction for dealing with credit report errors. Also - Pressures in the chip industry have led to shortages and higher costs for smart phones. Should you upgrade now or wait? Credit Bureau Errors: Segment 1 Ask Clark: Segment 2 The Price Of New Cell Phones: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Report: Worst Credit Bureau for Resolving Errors (and How To Fight Back) Experian and TransUnion Are Leaving More Mistakes on Credit Reports — ProPublica Why You Need To Check Your Credit Report Today - Clark Howard What Is a Good Credit Score? - Clark Howard Clark Deals: Cell Phones & Smartphones Archives 5 Tax Scams You Need To Watch Out for in 2026 - Clark Howard What's the Best Savings Account for a Teenager? - Clark Howard What Brokerage Do You Recommend for First-Time Investors or Kids? Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
0:12 Speaker 01 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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0:50 Speaker 03 I'm so glad you're with us on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. This episode, it has become more important for you to monitor your three credit reports because the number of errors is going through the roof. I'll tell you why. The credit bureaus, at least two of them are saying, too bad, so sad, and leaving errors there. And later, how often do you get a new cell phone?
1:30 Speaker 03 So I got to tell you strategies for you on when to get a new cell phone and more important, when not to. So ProPublica that does deep dive research into various things affecting you and me, did an extensive study of Equifax, TransUnion, and Experian. And I have picked on Equifax a lot over the years and want to tell you that the research done by ProPublica.
2:08 Speaker 03 Found that Equifax is doing a better job, not an outstanding job, but a better job, significantly better than the other two credit bureaus at dealing with customer complaints about inaccuracy. And the way it's referred to in their study is it shows the number of complaints per month. And the number of complaints about inaccuracies on credit reports is up dramatically with all three credit bureaus over the last two years. I mean, skyrocketing number of complaints filed by consumers. And then the question is, how do they deal with them?
2:53 Speaker 03 So in a typical month that Equifax gets about 160,000 or so complaints from consumers who've looked at their credit files and find inaccuracies, they solve about 100,000 of those. I would say that for an industry that historically has been pitiful in how they've treated consumers, looking at us as just, just a bother. That's better than I would expect. You want to talk worse than you would imagine? Let's talk TransUnion.
3:32 Speaker 03 Latest data on them is they are only resolving about a third of the complaints consumers file. So TransUnion's like, who, what, us? Huh? And this is why you've got to have an eagle eye out. And let's talk Experian. Oh my goodness. The data on Experian is beyond pathetic.
3:59 Speaker 03 Experian's success, if you would call it, and dealing with complaints from consumers is this is shocking, but it's basically near zero. Less than 1%, less than 1% of people who have a problem on their Experian credit report, contact Experian and get it taken care of. That is beyond outrageous. Because what that error on your credit report can do is it can lead to denial of a loan. It can lead to credit card companies deciding to close your accounts.
4:41 Speaker 03 It can cost you a job that you need when they rely on a credit report and they're like, oh, this person's not responsible. We don't want them at our company. Insurers might deny you insurance or charge you more because of the errors. This is absolutely shocking to see this disaster that ProPublica found at Experian. So, two things here. One, what do you do? First, this is a case what you don't know can hurt you. When's the last time you looked at what the credit bureaus have on you?
5:24 Speaker 03 For free, at annualcreditreport.com, ignore all the stuff the bureaus try to sell you, you can see your actual reports and see if they're A-OK. You can sign up with Credit Karma and see the information on you at two of the three bureaus whenever you want, for free. And let's say you find something that's not right and you challenge it. Well, I've just given you the research that ProPublica came up with that found that Equifax, you got the best shot, that they're going to actually pay attention to what you send them and fix it. TransUnion, you got about a 1 in 3 shot.
6:06 Speaker 03 And Experian, you got a less than 1 in 100 shot. So what do you do? Let's say you're trying to do something in your life and they show your credit all messed up. What do you do when they ignore you when you file? Because in the past, the success was much higher.
6:26 Speaker 03 When the Consumer Financial Protection Bureau was actually doing its job, but now they're not. So what power do you have? You're going to be surprised. But the most effective tool people have been able to use when they've had to is you sue the credit bureau that is putting inaccurate information about you in small claims court where for a low filing fee and you don't need a lawyer, you sue them. And then what's the credit bureau going to do? Then they give you to somebody often at the credit bureau who will actually look at what you're complaining about and likely fix it.
7:09 Speaker 03 I mean, why should it have to be that way? But I'm telling you, if it's like a severe thing that's impacting your ability to get a job or keep insurance or keep your credit or get credit or be able to get a mortgage. And the credit bureaus are not doing what the law requires. The law requires that they do this. You use the law yourself. Shouldn't have to be that way. Krista?
7:38 Speaker 04 All right, Sam in California says, last year in the holiday season, I missed a $5 credit card payment. Normally I check every week, but due to traveling in the holidays, I forgot. I have six credit cards. Normally I use two of them, my Chase and Capital One. The others I only use occasionally to keep them active. I was checking my credit score on my Capital One site and it's dropped from 805 to 718. Is there any way to recover from this? I always pay my balances before the billing cycle ends, but I missed this for the first time in my life.
8:09 Speaker 03 Yeah, it's an ugly feeling. Two years ago, I guess it was, I missed making a payment on a card. And my score fell more than yours did. But the good news is it healed so relatively quickly. The scoring models, particularly the really sophisticated ones from FICO. Are looking for patterns and a single small missed payment heals relatively quickly. And the good news is you're still in the 700s. So as long as everything is paid on time moving forward,
8:51 Speaker 03 this will not be a significant problem in your life. But just as came up, I think just Friday, we had a situation where I said, I love where you pay directly at the websites of the credit card companies. And I also like it for you to consider having always minimum payments made automatically to each card. So you never have to worry about the impact on your credit. If you had had two cards that you in quick succession missed payments on, you would be shocked how devastating it would be to your score. And the time for it to heal takes much longer.
9:35 Speaker 03 In your case, this is really not going to likely harm you significantly.
9:42 Speaker 04 Josh in Pennsylvania says, Clark, I recently had my credit pulled for a mortgage. It said my score was lowered because I have too many revolving credit cards with national banks. I have three that I use regularly and one that I use on occasion. My utilization is usually around 5%. I'm in the upper 700s, so no big deal. But have you ever heard of this? It seems another example of financial institutions moving the goalposts for no good reason.
10:05 Speaker 03 Okay, so let me tell you, this is one of the things that is weird. When you look at a credit report and they're telling you, well, your score was affected by this or that. The factor they're talking about is such a minute part of your credit score that obviously it's meaningless. If you're in the upper 700s, ignore what they put there. It's just basically gibberish. Now, different issue. The underwriter at a mortgage company can be somebody who gets nervous about how much available credit you have.
10:44 Speaker 03 And that individual may say, well, we want you to close one of these revolvers because we just don't like how much available credit you have. But that's not something I've heard a lot lately, but that could happen. I wouldn't expect it with somebody with a score like yours that's so sky high.
11:05 Speaker 04 Ashley in Georgia says, my dentist's practice is switching to a fee for service model. This means I'll pay full price for a procedure or checkup at the time of my appointment. The practice submits an insurance claim to my insurance company. And then after deliberation, the insurance company directly sends me a check to reimburse me. Forgive my ignorance of this, if this is a common payment model, because it's new to me and threw me for a loop. What if my insurance company doesn't deliberate and decide to cover as much of the cost if they know the bill was already paid in full by me? They have to work even less now, right? What are some things I should be aware of when walking into my next appointment to advocate for myself? Please help.
11:48 Speaker 04 I'm one of the rare Clarkies out there who loves going to the dentist and I get that feeling of fresh and clean teeth.
11:55 Speaker 03 So our mutual friend Sheri wrote this.
11:57 Speaker 04 I know, right? She loves.
11:58 Speaker 03 And she, what's her name is Ashley?
12:00 Speaker 04 No, no, no, no.
12:02 Speaker 03 Because I've never met anybody who loves the dentist more than Sheri.
12:06 Speaker 04 Well, now we know, now we know Ashley. It does feel great. It feels great when you're done for sure.
12:12 Speaker 03 All right, let's talk this through. What may have happened, and I'm only speculating here. Dentist's office as a courtesy will run insurance for you, estimate the bill. And if it turns out they were wrong, they expect you to pay whatever it is. And so you go out the door with a potential liability to the dentist. I'm guessing, just speculating, that your dentist, Ashley, had a number of customers who, when there turned out to be a balance bill, were like, who are you? What? I'm not paying that. I can't imagine another reason why they do it if they are submitting the insurance
12:56 Speaker 03 anyway. They just want to make sure that they don't get left holding the bag with an unpaid bill is what I'm guessing. Now, if this is your speculation that the insurer would short pay you because of this process? No, that's not going to happen. But you are the one laying the money out upfront, waiting for reimbursement, and I don't know how long your insurer is taking to send you back the money. If you love your dentist and you're not worried about laying the money out, then keep going to that dentist. But if laying this money out is a burden on you, you may have to consider switching to a dentist who
13:37 Speaker 03 doesn't have you lay out the full cost upfront like that. And, I mean, I love my dentist, I love my hygienist, but I don't exactly look forward to getting in the chair and hearing that whining noise of the equipment. Call me crazy. Anyway, coming up ahead, I want to talk to you about what's going on behind the curtain with not cellphone service, but cellphones themselves that you need to be aware of.
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14:19 Speaker 01 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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16:22 Speaker 03 The chip industry goes through cycles. I'm talking about computer chips. And the industry has enormous cost in building fabricating facilities. And they're guessing what demand's going to be. And if they guess wrong and demand is softer than it is, why these companies lose a lot of money? On the other hand... If demand is stronger than they anticipated, the price runs up on memory chips of various kinds. And at the same time, it takes years to build the facilities that fabricate these chips.
17:05 Speaker 03 So we're in a cycle right now of shortage. And that's why people who don't get quote unquote free phones from their cellphone carrier in return for being handcuffed to them for three years are suffering a bit of sticker shock from how much phones are costing. And some components in phones are also still subject to some of the tariffs the president's imposed, pushing prices up. So people have already been stretching the amount of time they keep a phone they have. And that's a smart decision because so many of the changes now in cellphones year to
17:49 Speaker 03 year are so incremental that if the phone you have is working fine, keep using it. I was in a friendly conversation with someone, didn't get to an argument, but they were upset with me about talking about why I hate the thing of getting the supposed free phone from the cellphone carrier because you think you're getting something free, but you're paying a lot higher monthly bill for the service. Because really, most of us don't need, but we want that new phone. And all the hype and advertising and all that gets us wanting it.
18:29 Speaker 03 So in an ideal world, you have a phone that does all the stuff you want. Even a lot of mid-range phones have great cameras in them. And you just keep using that phone and you own it, hopefully free and clear at some point. And you use this chip shortage as a time that you say, you know what? I thought this was the year I needed a new phone, but I'm okay. I'm gonna wait. And keep your money in your pocket because again, the industry is going to build new fabricating facilities and supply and demand will get back into sync and then phones will
19:14 Speaker 03 get cheaper again. When I talk about phones getting cheaper, I'm talking about the real price, not the fake one from AT&T, Verizon, or T-Mobile. The real prices will come down some once the chip shortage is dealt with. And people understand this because so far this year, the sales of smartphones are down double digits, double-digit percent because people are looking at the prices and they're saying, you know what, what I was tired of, it suddenly looks a whole lot better to me. Krista?
19:50 Speaker 04 Okay, Lynda in Maryland says, "My tax preparer last year did not include my traditional IRA contributions on my 2024 taxes. I had to kick myself severely for this. I had to pay a significant amount to the IRS. Is there anything I should do about that now?" And I, oops, I mean she, began the 2025 return and correctly reported contributions this year, and boy, did that make my return look great. The 2025 return also asks about a previous year's amounts, but I'm afraid not having reported any of the previous year and now reporting this will flag my return for an audit. What do you recommend I do, if anything, about 2024? And should I mention the previous undisclosed contributions on my return?
20:34 Speaker 03 Okay, so Lynda, you're asking me for advice. I'm not a CPA who does tax, but I will tell you, it is not going to be a big deal for you to report the 24 contribution on your 25 return. Do a 1040X, which is a simple, all it is is an amended return. So many amended returns are filed every year. It's not going to be an automatic audit kind of thing like you worry about. You get the money back from 24 that you, as you're still in plenty of time to do the 1040X and get the tax benefit you were supposed to get. Cause think of, think of how bad this is.
21:18 Speaker 03 You're gonna have tax due on that money in that traditional IRA you contributed to from 24, but you didn't get the upfront tax benefit. So you absolutely amend the return with the 1040X. And while we're at it, Lynda, while we're talking about this, I also want you to consider, should you be doing traditional IRA or should you be doing Roth? Unless you're in a giant tax bracket, I know I'm repeating, repeat on this. You should be doing Roth, not getting the current tax deduction, but having the benefit of years of tax-free growth and spending tax-free,
22:02 Speaker 03 which is what you get out of the Roth.
22:04 Speaker 04 Can I also say, it seems to me like, first of all, Lynda, you say you're kicking yourself, but you used a tax preparer to do this. And that tax preparer sounds like they missed putting your contributions for your 2024 taxes. So I feel like that person, first of all, should have told you about this other form and what to do, and they should be providing you service for free on that. And I wouldn't have them do my taxes this year. I think I would.
22:28 Speaker 03 Well, I thought, I thought she said she was doing her own taxes.
22:31 Speaker 04 No, she said that, she said.
22:33 Speaker 03 She said, I, oops, I mean.
22:36 Speaker 04 She.
22:36 Speaker 03 Oh, okay.
22:37 Speaker 04 Began the 2025 return.
22:38 Speaker 03 Yeah, so I completely misunderstood what, what you were reading. So yeah, it's completely normal that the preparer, having made that oversight, should prepare the 1040X. And there's so much stuff involved with doing a return. That's why I go through it line by line when I get my tax return back from my preparer before I submit it. And it's something that you missed, but you were paying somebody to do it. So Krista's advice is better than mine.
23:15 Speaker 04 I don't know about that. Okay. Marcus in New York says, my enrolled tax preparer just submitted my tax return and it was rejected by the IRS because one had already been filed with my social security number. Obviously, this is fraud. I'm listening to you and I've had my credit frozen for years with all three credit bureaus. How did this happen? And now what do I do? Help?
23:36 Speaker 03 Okay, so the IRS is its own separate thing and doing a credit freeze does not prevent tax ID theft, tax ID fraud. So who knows what the reason that that fake return was done. But now the IRS thinks you've already filed and probably gave a false refund to whoever it is. Now, Marcus, number one, I hope that you're not do a refund because you're gonna hate what I'm about to say. If you're do a refund, you may not get it for 10 to 14
24:15 Speaker 03 months now. Your return will have to be submitted now as a paper return. And the IRS is gonna have to go through the whole thing with, oh, this, it was, that one was a fake one and whatever. And moving forward, the IRS will request that you set up an IRS PIN code, where they will issue you a code that has to be submitted with your electronic submission of your tax return that you'll do next year for 26. And that code means the criminal won't have it and the IRS won't accept a fake return from somebody else because they
24:55 Speaker 03 won't have your PIN. And as a preventative measure, the IRS now allows anyone even who's not been subject to this terrible circumstance Marcus has been subject to, to apply for a PIN with the IRS. You go to IRS.gov and you'll see how to apply for a PIN. And that means that your return cannot be submitted electronically any year till you provide the PIN as part of the process of filing.
25:23 Speaker 04 And David in Washington says, I'm 16 and I'm starting to work. What would be a bank that would be good to have as someone who's in high school and working?
25:32 Speaker 03 Well, I'm so glad you asked this because David, the bank I want you to be with is not a bank. Since you're working, I would like you to open a youth account with Fidelity Investments. Fidelity of my three favorite children, which are Vanguard, Schwab, and Fidelity. Fidelity has done the most to be very friendly to teenagers that are working their first job. So you can have your quote unquote banking with Fidelity. And you also, since you're working a first job, can open a Fidelity Roth IRA.
26:12 Speaker 03 And at 16, putting money aside for the long term into a Roth IRA is going to double over and over and over again over the decades because you started as a teenager. What are Fidelity's fees for you to have a youth account with them? Zero. So it is my favorite starting place for somebody wanting to open their first quote unquote banking kind of thing when they're working their first job to develop a lifelong habit from get go of building up money towards the long haul.
26:57 Speaker 03 Habits developed young can be habits that change the course of your entire financial life. Now, if I jumped too many steps ahead, you're not interested in having your own retirement account yet or anything like that, where would I be? It would not be a bank. It would be at a credit union. A lot of credit unions in Washington state. You can go to C U N A dot org, I think is where you can see credit unions near you that you might be eligible to join. And many credit unions are very friendly to people after age 15, opening accounts with them. And the reason credit unions
27:42 Speaker 03 They're so much better than a bank, it's amazing because you're an owner of the place where a bank has to make money off of you to send to their stockholders a credit union as a co-op where you're one of the owners and you get the benefit of ownership. I'm so glad you're asking this question at 16 and I hope someday you've got huge money in that Roth IRA because you started it as a teenager and appreciate you joining us this Monday. Know all week long, we have one-on-one advice available for you as we've
28:25 Speaker 03 had since 1993 where you can get free one-on-one advice. If you go to Clark.com slash C A C, you'll see how to get that done. It's just one more way we offer you empowerment through knowledge so you can save more, spend less, and never, never, not ever get ripped off. And on Wednesday, we have a special treat for you. All bad advice on our April Fools edition of our podcast. See you then.
29:03 Speaker 00 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
29:15 Speaker 01 Price and participation may vary. Promotion pricing may be lower than meal pricing.
29:19 Speaker 02 They're running a cover two defense, but you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants or stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats. Order now. Terms apply. Product availability varies by region. See app for details.
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