Secrets That Credit Bureaus Don't Want You To Know
There is an overwhelming amount of information about one's credit report circulating on the internet these days. However, as most have figured out by now: just because it's on the internet, doesn't mean it's true. Taking that one step further, it's almost more important what is not being said rather than what is. This is especially true when it comes to the world of consumer credit reporting.
It wasn't until the 1970's that credit reports and credit scores were used by all lenders to determine worthiness of a loan. Credit scoring got another huge boost in 1995 when the U.S.’s two largest mortgage-finance agencies, Fannie Mae and Freddie Mac, recommended lenders use FICO credit scores. However, it wasn't until 2011, part of the Dodd-Frank financial reform bill, that lenders were required to disclose credit scores to their applicants.
Credit scoring is rife with controversy, including vulnerability to errors. The rise in automated lending decisions, the billions of pieces of data handled each day, as well as the explosion of identity theft has left major rooms for error in scoring. With it's complex scoring formulas and different approaches among lenders, it's no wonder it's caused confusion and upset for both consumers and lenders. So who is running the show?
The 3 main credit bureaus, Experian, Transunion and Equifax are NOT government agencies. They are for-profit businesses. They hold a monopoly over all other competitor reporting agencies and set the standards for reporting consumer credit. So who regulates them?
Only recently have the credit bureaus had to follow stricter guidelines due to the FCRA (Fair Credit Reporting Act). It wasn't until 2005 that consumers were even allowed to have yearly access to their full credit history. Credit-scoring systems were designed for lenders, not consumers. This means that scores weren’t created to be easy to understand, and the actual formulas and the details of how they work are closely guarded trade secrets.
Taking all of this into account it can seem like the cards are stacked against you. However, there is a way to use this information to your advantage! We have been in the credit repair business for over 20 years and have cracked these companies codes. You may be thinking "I can't afford to pay someone to fix my credit", but really, you can't afford not to.
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