Of those, 1 out of every 5 have mistakes that adversely affect their credit scores. Considering how important credit is for people to build their business and their lives, credit reporting agencies have an obligation to fix these errors. But they don’t.
So what are some of their most common errors?
- Paid bills that are showing as delinquent.
- Open accounts that are listed as closed.
- Mistakes due to similar names and social security numbers, just one digit off.
What makes the situation more difficult to navigate is the fact that the three credit reporting agencies:
…have a dismal record of helping consumers out of their mistaken identity nightmares. There is no number to call to speak to a customer service representative. A consumer who has done nothing wrong is drafted into a process that encourages people to quit in exasperation. It starts with a lengthy on-line questionnaire which is unsatisfying and promises nothing, in addition to being emotionally draining.
What happens next is equally surreal: somebody in a call center in another country who is not trained in American law, acts as judge and jury over the claim. He or she applies a two-digit code to your file. Then it’s time for you to gear up for a six, seven or eight year waiting game.
A woman had a name mix up on her report and, as a result, she was not able to refinance her home, or get a car — or even sign her children’s student loans. She even went so far as to contact her alleged creditors, who affirmed that she was not the debtor they were seeking. None of this mattered to the reporting agency. She ended up suing the credit reporting agency and she won, but her justice was extremely delayed.
The takeaway is quite simple, and it’s a familiar variation on a modern theme: credit rating agencies are not there to help consumers. They are around to make money, and the only way to do that is take the side of the creditors, every time. The joint effort of Experian, Equifax and TransUnion is mandated by the US government and is considered the safest place to get an accurate report from all three companies at once.
The last thing to consider when sizing up the behemoth credit scoring industry is the relatively recent, and extremely profitable practice of Identity Protection. Sites like freecreditreport.com and truecredit.com turn out to be nothing more than sales pitches for continuous identity monitoring of your credit score.
In the meantime, it’s never a bad idea to strengthen your security protections:
- You can place extra security alerts.
- Long passwords with letters, numbers and symbols.
- Have texts sent to your cell phone to monitor activity.
- Use fictional names and places for security questions — but don’t forget them!
If you are a victim of identity theft the first step is to file a police report. It’s a crime and you need that for your investigation anyway. But here’s wishing you will never need any these precautions.
Enjoy this beautiful time of the year in the knowledge that your money is safe!
Judith Heft, Principal, Judith Heft & Associates is a personal financial concierge with offices in Greenwich and Stamford. She can be contacted via email at firstname.lastname@example.org or by phone 203-978-1858.