TransUnion has introduced a new Credit Washing Solution designed to help identify and stop the growing practice of removing legitimate credit data from consumer reports. The company says credit washing has expanded sharply in recent years, creating financial losses for lenders and distorting how consumer risk is measured.
TransUnion data highlights how widespread this activity has become:
- Roughly 5% of consumers have had charged off accounts suppressed for atypical reasons in 2025
- An estimated $10 billion in debt will be erased from credit reports by yearend
- Consumer-initiated charge-off suppressions have increased nearly 700% in the past two years
- Lender-initiated suppressions have increased 200% in the past four years
These suppressions often originate from consumer disputes, lender furnishing updates, credit repair activity, and debt settlement interventions. When legitimate derogatory data is removed, credit scores can rise quickly and inaccurately.
TransUnion found that consumers with atypical suppressions often see their credit risk inflate by at least one risk tier. In extreme cases, profiles have shifted from subprime to super-prime overnight. Consumers with these suppressions are 3.5 times more likely to charge off a new account within the first year.
Steve Yin, global head of fraud at TransUnion, said that credit washing continues to be a major detriment for the credit ecosystem because it masks true credit and fraud risk. Jason Laky, head of financial services at TransUnion, added that the new solution is designed to help institutions protect themselves while continuing to grow responsibly.
TransUnion emphasized that credit washing is not the same as correcting inaccurate information. Legitimate disputes remain an important consumer protection. The challenge for lenders is distinguishing real disputes from actions intended to artificially present a borrower as lower risk.
As credit washing continues to expand, tools that surface inconsistencies and hidden risk may become essential parts of the furnishing and credit decision processes.
