The credit bureaus love the fact that the average consumer knows very little about them. All consumers really know is that credit bureaus have major power and control over their financial lives. Would you agree that this is true? If so, why don't we know more about them?
I don't know about you, but when I went to apply for my first loan, I didn't know anything about them. But, I quickly found out that they were the ones I needed to contact when I got declined. I was told by the bank to contact them to see why I was declined. Like so many other consumers, I just figured it was a government agency that kept private records of everyone's financial information.
Years later, I found out that wasn't the case at all. Credit bureaus (also known as consumer reporting agencies and credit reporting agencies) are for profit, private companies. How do they profit? They sell your private information. Do you remember giving them permission to sell your private information? I don't either.
The truth is most Americans are completely unaware of their rights when it comes to their credit reports and what is being sold, who it's being sold to and what can and can't be reported...and that's EXACTLY how the credit bureaus like it. Let me tell you why.
When you dispute information on your credit reports, by law, the credit bureaus must respond within 30 days. That means that they must hire employees to deal with such disputes. The more disputes they get, the more employees they must hire. Since it is free to dispute accounts, this cuts into their profits. That doesn't make them very happy at all.
They would prefer that you just accept what is reported and go on with your life paying high interest rates and getting denied credit. In fact, when you do try to dispute, they make it as difficult as possible. They use every technique within the law (and many times outside of the law) to stall, confuse and discourage you from ever contacting them.
Statistics show that over 79% of consumer credit reports contained errors or mistakes. Can you imagine if even half of them took advantage of their federal rights and disputed items on their credit report? That would cost the credit bureaus a lot of money. But, best of all and even more important, it would save consumers millions of dollars. As you can see, the banks would prefer that you weren't aware of these rights either. Smart consumers pay low interest rates and that's just not profitable for lenders or consumer reporting agencies.
