The Credit Mess

I'm in a battle to remove false and inaccurate information from my credit reports. I've also been digging into just how badly screwed up the credit system is. One thing I found very interesting was this report that contains some very alarming statistics about just how common errors in credit reports are.

For example:

"Twenty-nine percent (29%) of the credit reports contained serious errors - false delinquencies or accounts that did not belong to the consumer - that could result in the denial of credit."

"Twenty percent (20%) of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that demonstrate the creditworthiness of the consumer."

The second quote is what irritates me so much. These accounts weren't missing - the creditor probably just didn't report them. After all, the credit reporting system is completely punitive in nature, and companies couldn't care less about making sure they help keep your score high. Instead, they want to keep your score low, so you're stuck with higher interest rates.

Capital One is a great example of this. Most creditors report two numbers relating to your account: What your credit limit is, and how much of it you've used. Capital One, on the other hand, only reports what your balance is. This way, it appears you have higher balances than you really do. This keeps your score low, and you're not able to get a better credit card with a better rate. It's Capital One's little customer retention scheme.

Comments

[karrie]

Thank you for posting this.

A few years ago, I noticed two statements on my credit report that were absolutely false. One said that I received credit before I was 17 years old, and the other showed a credit card that belongs to my mother. My mother and I have the same first and last initials. Essentially, the reporting agency was mixing me up with my mother (which is why they thought I had credit before the age of 17, and why they listed her card on my report). I wrote the reporting agencies to dispute the information, provided proof up the wazoo, and four years later, the inaccurate information is STILL there.

It infuriates me how these agencies can be so irresponsible, when they have so much power and influence in our lives.

[Ralph T. Smith]

Until CapitalOne Bank is stopped by federal officials they will continue ripping off the public with what I call "legalized fraud." They currently spend $1 million daily on false and misleading advertising that suckers naive customers into their fold.
Caveat Emptor!