But What Do You Really Know About The Credit Bureaus

Category: Finance, Credit.

They wield tremendous power over your life- and the lives of every other bill- paying American adult.

Friend or foe? But what do you really know about the credit bureaus? Fact or fiction? And that s how the credit bureaus want it, argues Dr. Survey after survey suggests that the average American knows little about consumer reporting agencies other than that they essentially control consumer credit profiles- and as a result, their buying power. 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 that helps consumers remove errors and negative information from their credit reports. And the odds are that an error will appear.

The fewer facts you know about the credit bureaus, the more difficult it will be to correct a problem when one shows up on your credit report. 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. Fact: Many companies are in the business of collecting, compiling and processing credit information. Here are some common credit bureau fictions and the real facts behind the fiction: Fiction 1: There are only three" official" consumer reporting agencies. Fiction 2: The three major credit bureaus are officially sanctioned by the federal government. Fact: Different creditors often report to different credit bureaus. 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 three major consumer reporting agencies all have the same information.

In fact, there is no law that requires them to report to any of the big three bureaus at all. Fiction 5: Consumer reporting agencies will act promptly to help me rectify an error or remove negative information from my credit report. Consumer reporting agencies do not share information either, so if you find an error on your report from all three agencies, correcting it with just one of them does not mean the error will automatically come off the other two reports. Fact: Federal law requires all credit bureaus to complete an investigation into a consumer complaint within 30 days of when it was first made. Given those four options, you have a 75 percent chance of getting an answer you won t like. The bureau may decide the disputed item remains on the report as is, revise but not delete the information, or deem the, delete the information complaint frivolous. Increasingly, frustrated and fed up consumers are turning to professionals like Lexington Law to help them resolve credit report issues and remove negative information from their credit reports.

Involving a professional can achieve faster, better results. Anyone who has ever disputed an item on a credit report knows the process can be long, aggravating and perhaps ultimately fruitless. While each case is different and individual results may vary, participating Lexington Law, on average Concord- level clients have seen 7 removals from their credit reports within the first 90 days of working with the firm.