In a recent blog entry I wrote, ?Significant legislation has been enacted to protect you from the impact of the credit bureau's inaccuracies. The right that you have to receive copies of your three credit reports for free on an annual basis is not a friendly public service by the credit bureaus. The bureaus have been required to provide this service as one of the protective measures included in the Fair and Accurate Credit Transactions Act. Your credit report can have a major impact on your financial life. Give your credit the attention that it deserves and review your reports regularly.?
A Reader Responds
A reader responded by asking, ?I've read that the credit bureaus are regulated by the Federal Trade Commission. Doesn't this indicate a relationship with the government?? Below is my reply along with some additional thoughts on the subject.
The Credit Bureaus are Not Government Agencies
I replied that, ?The relationship between the credit bureaus and the government is the same as the relationship that you have with the government. Because your actions are conscripted by law does not in anyway suggest that you are necessarily a law abiding citizen (although I'm sure that you are!). As many people live in a constant adversarial relationship with the government, so do many large businesses. The credit bureaus happen to be constantly at odds with the law. Given the potential impact that credit reporting errors can have on your financial life, I strongly suggest that you modify your opinion of the bureaus enough to be very cautious of the content of your credit report.?
Strictly For Profit
One of the unfortunate underlying assumptions that people, like the above reader, have in their attitude towards the credit bureaus is that the bureaus have some form of official status. This could not be farther from the truth. They are strictly for profit businesses. Experian and Equifax are publicly traded companies and list their revenues in the billions of dollars. Trans Union is a privately held company with revenues estimated also in the billions. The three credit bureaus have maintained a consistently adversarial relationship with the government and consumers throughout their histories.
An Adversarial Relationship
An adversarial relationship with the public is not unusual for large businesses. All activities are chosen for the purpose of producing profits. The history of lawsuits brought against the bureaus over time paint a clear picture. The office of the Attorney General of Florida is currently pursuing action against Experian relating to misleading claims, deceptive advertising, a misleading domain name (freecreditreport.com), and failure to honor cancellations to their credit monitoring service offered through this so-called free credit report website.
A History of Conflict
The type of behavior described by the Office of the Attorney General of Florida is consistent with countless charges against the three bureaus. In the 1970s Equifax was charged with rewarding its employees for collecting negative information on consumers. This charge, which resulted in a consent decree, provides an interesting hint about the corporate culture.
Experian Gets an ?F?
In 2006 a leading consumer advocate website rated the customer service offered by the three bureaus. The ratings were dismal including a grade of ?F? given to Experian, who was sited for not even providing customers with a customer service telephone number. Credit repair is not on the priority list at the credit bureaus!
Nothing Has Changed
The above mentioned consumer advocate site has a current post that says, ?With the 2003 amendments to the FCRA, and the introduction of the FACT Act, millions of consumers will see the quality of their credit reports degrade even further. FACT stands for Fair and Accurate Credit Transaction Act, but in reality it is just our government trying to appease millions of consumer who complain about the current credit reporting industry. But they are only appeasing us in name only??
The Forces at Work
We have been assisting our customers with credit repair since 1989 and as such have dealt with the three bureaus on a consistent basis. There are two major forces at work that shape the behavior of the credit bureaus. The first major force is the need to maximize and protect profits which may result in decisions about operating policy that are not in the best interest of the public. The second force that conspires with the profit motive is the sheer bulk of data that the credit bureaus are trying to manage and maintain. The result has been widespread and serious errors on consumer reports combined with a horrible corporate bureaucratic resistance to fixing the problem. So check your credit reports regularly.
Copyright ? 2007 James W. Kemish. All Content. All Rights Reserved.
Survey after survey suggests the average American knows little about the credit bureaus other than that they control consumers' credit reports - and as a result, their purchasing power. And that's how the credit bureaus want it, argues Dr. Randy Padawer, a clinical psychologist whose research into consumer credit has been featured in Smart Money Magazine and the bestselling FICO 850 seminar for The Motley Fool.
"The three major credit bureaus truly want consumers to believe that they've each been blessed with an officially sanctioned franchise," says Padawer, who has consulted for Lexington Law, a firm whose credit repair services help consumers dispute errors and other questionable negative information from their credit reports.
The less you know about the credit bureaus, the more difficult it will be to resolve a problem when one shows up on your credit file. And odds are an error will appear. Four out of every five credit reports contain errors, and one out of every four contains errors serious enough to cause significant problems for consumers, according to research by the National Association of State Public Interest Research Groups.
Here are some credit bureau misconceptions and the real facts behind the fiction:
Fiction 1: There are only three "official" consumer reporting agencies.
Fact: Many organizations are in the business of collecting, compiling and processing credit information.
Fiction 2: The three major consumer reporting agencies are official government entities.
Fact: "There are no official bureaus," Padawer says. "While most Americans perceive their credit reports to have at least the same legal standing as their driving records, the truth is that the government had no role in establishing the for-profit companies which produce them."
Fiction 3: The big three credit bureaus all have the same credit information.
Fact: Different creditors often report to different credit bureaus. In fact, there is no law that requires them to report to any of the big three bureaus at all. Consumer reporting agencies do not share information either, so if there is an error on your credit reports provided by all three agencies, correcting it with just one of them does not mean it will come off the other two credit reports at the same time.
Fiction 4: Consumer reporting agencies will act quickly to help me fix an error or remove inaccurate negative listings from my credit report.
Fact: Federal law requires Equifax, Experian, TransUnion, and all consumer reporting agencies to complete an investigation into a consumer complaint within 30 days of when it was first made. The credit bureau may decide to keep the disputed item on the report as is, revise but not delete the information, delete the information, or deem the complaint frivolous. Given that the easiest option is to simply deem your complaint as frivolous, many consumers find that their legitimate disputes get dismissed.
Increasingly, frustrated and fed up consumers are turning to credit repair professionals like Lexington Law to help them resolve credit report problems. Anyone who has disputed an item on their credit report knows the process can be long, aggravating and perhaps without results. Involving a professional can achieve faster, better results.
Both Jim Kemish & Stuart Hunter are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jim Kemish has sinced written about articles on various topics from College Student Loan, Credit Loans and Free Credit Report Score. Jim Kemish is the president and founder of Power Mortgage, a company based in Delray Beach, Florida. Jim is also the President of Sky Blue Credit, a n. Jim Kemish's top article generates over 301000 views. to your Favourites.
Stuart Hunter has sinced written about articles on various topics from 3 Credit Bureau, Bad Credit Loans and Cars. It is possible to legally . To learn more about disputing the negative information in your credit reports, please visit Lexington Law, the trusted. Stuart Hunter's top article generates over 22200 views. to your Favourites.