Credit report errors often hard to fix
Credit scores count–and not just for credit card applications
Having a poor credit score can affect your life in a big way. To start with, it can prevent you from accessing the best mortgage and credit card deals. That’s bad enough when you think how expensive it can be to pay just a little more on a large loan such as a mortgage or to be denied the best credit card rates.
But today things are worse. It can be more difficult and/or expensive to get your utilities hooked up, to rent an apartment or to obtain a cell phone contract if your credit score is low.
Promoting good credit
But most scary of all, a damaged credit report can prevent you from getting a job or promotion. Yes, some employers carry out credit checks on prospective employees, and a few do so when considering one of their existing people for a better post.
It seems particularly cruel that many who need jobs in order to rebuild their credit are denied them because of their credit.
Credit report errors
Plenty of people have lousy credit scores because they’re lazy, feckless or stupid. Others have run into problems through unemployment, illness or divorce. But those in a third group may not even know they have a problem, because they’ve done absolutely nothing wrong. They’re victims of errors. And it’s more common than you might think.
Not to worry. The Federal Trade Commission has a PDF brochure called “How to Dispute Credit Report Errors,” and it says:
Under the FCRA, both the credit reporting company and the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the credit reporting company and the information provider.
So that’s okay then, right? Wrong, at least according to attorneys practicing in the area of consumer debt.
Why credit reporting agencies won’t fix problems
Two of these, John G. Watts of the Watts Law Group, PC, and M. Stan Herring, PC, both of whom are based in Birmingham, Alabama, recently wrote a paper entitled “Six reasons why consumer reporting agencies intentionally keep false information on your reports.”
One of these reasons was especially shocking. Apparently, some credit bureaus outsource what they somewhat optimistically term the “investigation” of claims of errors to companies in emerging nations where English is a second language. Worse, the fee a bureau pays to the outsourcing agency for each case can be as low as 25 cents, which ensures that workers are under enormous pressure to fulfill quotas. And that, in turn, means that each file can get, on average, only a few minutes’ attention. Indeed, one witness testified that an outsourcing agency offers Snicker bars to staff who beat their quotas.
No surprise, then, that many perfectly legitimate requests to correct an error are turned down.
Your credit report–making them fix it
The next edition of this blog will include John Watts’ advice on how to apply pressure on credit bureaus that won’t fix errors. In the meantime, you might want to get a copy of your latest credit report. You’re entitled to a free one once a year from each of the main bureaus.
And various services offer you the chance to monitors all your reports on a continuing basis. If that sounds good to you, check out these websites:
- Equifax Credit Watch Gold With Score Power
- Smart Credit
- Transunion – 3 Bureau Credit Monitoring
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