Do you know what it is? No, of course not. How could you?
That’s kind of how a commercial goes that I see every so often on TV. Except in that commercial, the question is: “I’m thinking of a number between 450 and 850. Do you know what it is?” The answer is a credit score. I think that this is a commercial for FreeCreditReport.com, but I can’t recall for certain. Anyway, if you click through to the site and look in the upper right hand corner of the screen, you see a logo for Experian, one of the three major credit bureaus. The other majors are Equifax and Transunion.
Why is this even an issue? In this case, you’ll be prompted to enter your credit card information to get a free credit report. If you forget to cancel right away, you’ll be hit with a recurrring $12.95 charge on your account each month. Now this probably isn’t a problem, but something about it just doesn’t smell of encouraging proper use of credit.
But that’s not really the biggest problem. People are led to believe that this is some altruistic pursuit on behalf of these credit bureaus. Now, I’m a happy capitalist. I understand that not everything has an altruistic bent must even be done for that reason to have that result. Look at the situation regarding the extinction of whales. The real problems, however, are secrecy and privacy.
Many people don’t know what’s in their credit reports. Contrary to what I discussed earlier, it’s a good thing to request and review your credit report regularly. If you’re new to requesting your credit report, you may want to start by requesting it through AnnualCreditReport.com, however. This site allows you to request a free credit report from each of the three majors every year. And the best part, is that there are no strings (or unexpected charges) attached.
Once you have requested your reports, you’ll find out what other people are seeing. Who are these other people? Just to name a few: companies that you have applied for credit with, companies that you’ve never heard of that want to extend credit to you, insurance companies deciding what type of rate to charge you, companies that you already do business with that are making sure you are paying your other bills, even potential and current employers. While you may never have requested your credit report, a lot of other people have. Luckily, there are resources to lock others from looking at your credit file, such as OptOutPreScreen.com, which will keep people with whom you don’t do business from pulling your report in an attempt to offer you credit. But still, companies that you do business with still have access to your report. They could, for example, use this information to cancel your account with them based on whether you’re paying your bills with some other company.
Once you’ve got a copy of your reports, you’ll also have the opportunity to dispute incorrect information. This is usually the most frustrating part of the process. It is long and isn’t even guaranteed to correct the errors that are present. Even in cases where some form of identity theft is evident, it could take many months to even get a semblance of truth in your credit report. In my case, I’ve been disputing errors for many months. My most recent disputes successfully had all disputed items with Experian updated, while the same creditor reported that there was no error with the incorrect Equifax information. For cases where you have no idea who the particular company is that is reporting incorrect information, you can try debt validation in an effort to remove the incorrect listing. While this process is far from perfect, it is much better than credit reporting in the 1960s, which involved collecting files on even more personal information, such as sexual orientation and drinking habits.
So many things of the decisions that individuals make in life are determined by these secret organizations. Ultimately, because of the difficulties associated with the use of the credit bureau and dispute system, there is a feeling of complicity on the part of credit bureaus. Credit bureaus make money off requests for your report, regardless of whether the information is correct or not. The process is too long and obfuscated. The credit bureaus are private corporations. As government created entities, these corporations are subject to the same laws that other corporations are. Relevant legislation that every person should know about includes the Fair Credit Reporting Act and the Fair Debt Collection Practices Act (which protects you from overzealous collection agencies). Know these acts, as they are the rules of the game and one of your only protections in the fight for your credit rights.
But back to my original question. Recently, I was checking the status of my Transunion dispute. Nowhere on Transunions’s site could I find the link. This could have been operator error on my part, so I googled it. I came up with a page that asked for my File Number, which I had and my Password, which I couldn’t recall. I clicked on the Forgot Password link and was taken to a curious prompt like this (click for full image):
To get my password, I need to answer my secret question. But my secret question isn’t being displayed. How can I answer a question when I don’t know what it is? Is it really for privacy purposes, or is it part of the conspiracy to keep people from fixing their credit reports?
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