The Credit Dispute Dance
By James Charlet
I have worked at an extremely high level within a credit-reporting agency. I have responded to attorney general complaints, lawsuits against them, congressmen, and lobbyist firms working on their behalf. I am considered an “expert.” I have also worked for credit restoration companies, including one of, if not the, largest as an executive. I have written letters for and on behalf of clients that specifically stated which sections and sub-sections of the FCRA (Fair Credit Reporting Act) were being violated by errors I saw on the client’s credit report, only to get a form letter response completely ignoring the substance of the letter. I recognize that it is odd to start an article this way, but I say these things only to illustrate that what I am about to compose is made from a position of direct, first hand knowledge about the credit reporting industry and their practices. Frankly, it is my opinion that credit-reporting agencies would be happy if you did not even know that your personal credit report existed.
Recently, I mailed a letter from my home to the credit reporting agencies to investigate a couple of inaccuracies with my wife’s credit report. I reviewed the report online, composed the letter, had my wife review and sign the letter, addressed the envelope by hand, stamped it, and dropped it in the mail. To even my surprise they responded with a one-page form letter that, if I remember correctly, is coded as letter 501 in their system. It states that the dispute they received was “suspicious” and “not sent by me.” The letter is vaguely threatening and implies that some sort of fraud may have been committed. It is clearly designed to deter someone from investigating his or her credit report. Personally, I filed a complaint with the Better Business Bureau immediately, but let’s face it; most consumers would have thrown that letter in the trash dejected and never bothered the credit-reporting agency again.
So
what is the recommended course of action? Well according to the FTC (Federal
Trade Commission), some state attorney generals, and the credit reporting
agencies themselves; they are benevolent corporations who are ready to
do whatever they need to do when a consumer comes to them. They even
go so far as to actively discourage people from seeking any 3rd party
help in dealing with complex issues in their credit report, instead endorsing
“self help.” The obvious problem, as illustrated by the above two paragraphs,
is that this does not work.
To top off the problem, for all of the thousands of credit reports I have looked at over the years from the credit reporting agencies credit bureaus, I cannot think of one report that did not have some sort of legitimate error on it. Some errors were small, like an inaccurate open date or closed date. Others had something ridiculous like a mixed file between two consumers who never met, one with 50 collections, the other with none. Addressing these problems can also be a big gamble for the consumer based upon the knowledge or experience level of the random agent who services the file and the consumer’s ability to recognize whether or not their issue has been properly handled. For most consumers, this is just too much of a task to undertake with everything else they have going on in their lives. That is exactly how the credit reporting agencies and their real clients, the creditors, prefer it.
I do not write this to encourage cynicism or despair, but to propose a different perspective. I left the credit-reporting agency because, after a lot of soul searching, I came to believe that what they did was bad for average citizens. I saw how they lobbied and contributed to the creation of the laws that were to eventually regulate them: how they then hid behind those laws, blaming any errors on the creditors, while the creditors, in turn, blame the errors on the credit reporting agency. What consumers must do is be vigilant when they decide that their report is worth fighting for. Despite claims that are made by the credit reporting agencies, opting to utilize a credible credit restoration company to save you the hours of time and effort that could be spent doing it yourself can be a very good option. For others, if you choose to go it alone, make a solid commitment. Do your research, checkout online forums with others doing the same thing, respond when you receive mail from a creditor or credit reporting agency, and don’t be afraid to complain to higher authorities when it is necessary. Most of all, be very wary of any news or instructions that come from the credit reporting agencies themselves. They are in business to make money and they make more money when you don’t bother them.
© 2010 CRE Credit Services, Inc. All rights reserved.