Are the 3 main credit agencies too powerful?
Think about this: Your entire future is based on your credit scores in one way or another. - If you plan on buying a house, a car, or getting a loan for ANYTHING at all, you will run into a credit agency at one point or another. - If you apply for a job with the government, banks and many other businesses, your credit score will be used to partially determin whether or not you get the job. - If you apply to rent a space to live in, your credit score will be used to either approve or deny you. Experion, Equifax and Trans Union basically run your life. If you have had mistakes in your past, ones that you can no longer correct by paying them off, you're pretty much screwed. There are laws that govern how long items can remain on your credit report, but many people do not understand that companies can simply re-submit your information and it's back to the beginning. Should these 3 companies have so much power over every US citizen? Furthermore, many credit card issuing companies target teens at colleges around the US, offering free food / beverages/ other incentives to get the "Children" to apply for, and usually receive, a credit card. Many, if not most of these kids don't really have a basic understanding of how important their credit is, and will eventually abuse their cards, not pay the bills, and start their life in the real world with damaged credit. If you try and get a loan or anything like it, and your credit is not high enough, you cannot get the loan without a co-signer, which many people do not have access to. So in other words, you can't even really begin getting good credit without having to go through companies that completely rip you off and charge you enormous finance fees and percentages. Credit seems to me to be a really rotten thing in the long run.
Public Comments
- The credit reporting agencies are just that REPORTING agencies. They only put into a file what is reported to them. If it is not accurate then by law they must correct it. These companies have decades of data to build scoring models. They have figured that people who have had problems in the past may continue to have problems. As with any system people are going to fall through the cracks. A correction on your statement about what people don't understand. You said "There are laws that govern how long items can remain on your credit report, but many people do not understand that companies can simply re-submit your information and it's back to the beginning". You are incorrect on this. Creditors are NOT allowed to re-age the debt. Negative information can only remain for 7 years from the date of the negative item. So if the item is more than 7 years old, it must be removed. The exception to this is 10 years for a bankruptcy. Doing this would be violation of the FDCPA(Fair Debt Collection Practices Act) and FCRA(Fair Credit Reporting Act). Now, your issue(based on your additional details) seems to be more with the actual credit card companies marketing to college kids and people who don't really understand. On this issue, you might have a point. But that is not the fault of the Credit Reporting Agencies.
- OC makes a nice catch here. This simply demonstrates the main problem with credit reporting....people do not understand their rights, so they let them get away with murder. Credit bureaus are not much different then the IRS...you have to live with it. Not much you can do about it but cover your butt. As for the credit card companies....they are getting their paybacks. Just read where Capital One was taking some losses so they are going to jack up interest rates. We wouldn't want to consider the record BILLIONS of profits they are making though. Blame that on Congress for letting them get away with it. When a company makes a bad business decision they should be made to accept the consequences.
- I'm going to have to agree with the asker and disagree with the experts on this one. The credit bureaus are too powerful. The credit reporting system was not designed with the consumer in mind and it is corrupt because of who profits most from it. For years, consumer advocate groups have lobbied for reform. Finally, in 2004 Congress approved changes to the Fair Credit Reporting Act that placed new procedural requirements on the credit bureaus. Despite plenty of lawsuits and a record number of complaints to the Federal Trade Commission, regulators are just not enforcing the new laws. The whole credit scoring system is still unfair because consumers are guilty until proven innocent. Credit bureaus are still re-aging accounts. They still refuse to reinvestigate accounts that have been “previously verified”. They still reinsert deleted accounts without notifying the consumer as required by law. They still refuse to investigate inquiries. They still allow debt collectors to place hard inquiries on credit reports when the inquiry should be a harmless account review. (This alone can lower your score up to 50 points.) Did you know that the FTC refers consumer complaints to credit reporting agencies? That’s right. When you complain to the FTC about Equifax, Trans Union of Experian, they forward your complaint right back to them. The agencies will review the complaints and report the results to the FTC. Some believe it improves the odds of getting an inaccurate account deleted considerably. I believe the disputes should have been taken seriously without having to complain to the FTC. The CRA's are NOT your friends. They do NOT care about you and they consistently violate consumers rights. The sooner you realize this, the better off you are.
- Speaking as a nationally known credit score and mortgage lending expert (book, radio shows, newspaper column, etc.)... The credit bureaus are FAR more powerful than everyone here thinks. Your credit scores are checked by potential employers--low scores indicate to them irresponsible behavior AND high health care costs. Your credit scores almost always determine your auto and health insurance rates. They sell personal information on you that you never know about.
- The CRAs are supposed to be merely reporting agencies, but the number and frequency of lawsuits by consumers where the CRAs refused to do their jobs and investigate disputes clearly shows me they aren't doing their jobs and are far too powerful. Experian is heavily involved in skip tracing, which seems more than a bit of a conflict of interest. http://www.experian.com/whitepapers/4755ab.pdf http://www.experian.com/products/pdf/collection_advantage_ps.pdf http://www.experian.com/products/pdf/collection_adv_%20ref_%20guide.pdf http://www.experian.com/products/pdf/metronet.pdf http://www.experian.com/products/pdf/file_one_phones.pdf http://www.experian.com/products/pdf/electronic_directory_asst.pdf http://www.experian.com/products/pdf/skip_locator.pdf http://www.experian.com/products/pdf/social_search.pdf http://www.experian.com/subservices/docs/subscriber_services_sso_guide.pdf http://www.experian.com/products/pdf/debt_portfolio_evaluator.pdf http://www.experian.com/products/pdf/collection_report.pdf http://www.experian.com/products/pdf/collections_complete.pdf http://www.experian.com/products/pdf/collectscore.pdf http://www.experian.com/products/pdf/credit_profile_report_ps.pdf http://www.experian.com/products/pdf/call_center_scheduler.pdf http://www.experian.com/subservices/iscreendemo.swf Perhaps the scariest one is this. http://www.experian.com/products/pdf/call_center_scheduler.pdf "Call Center Scheduler uses demographics, geodemographics and lifestyle information to reliably predict the probability of a consumer being home at one of four times."
