There is a mammoth scam afoot: It’s called credit reporting and it can devastate your economic well-being, particularly if you have the double misfortune of dealing with corporate medicine. While Americans can now access that semi-holy document, the credit report, it is only available for free once a year from one of the three credit reporting agencies. However, as I recently discovered, annual access to this consumer dossier determining a borrower’s economic fate is really just extortion foreplay for the various credit “protection” products credit reporting agencies offer.
Follow me after the fold to see how tripping over a dog toy and injuring my knee had the effect of turning me from a financially respectable individual into a deadbeat.
Last year when I checked my credit, that arcane acronym the FICO score I had a GOOD credit rating in the high 700s. Seeking to obtain a second mortgage on my house, I checked my credit score and discovered that, unbeknownst to me I had been downgraded to 690—FAIR—because of a single—and inaccurate—blotch on my credit history: a $187.00 bill “in collection” that, according to the report had not been paid. This bill was from Radiology Associates, one of many medical bills I received over a brief period of time for a series of unfortunate medical problems at the end of 2006. These were not even major medical problems but the result over three months was a stack of bills six inches high.
I had protracted negotiations with my insurance provider, regarding these bills. Meanwhile, Radiology Associates sent one of the bills to collection 2/20/07. When I learned this, I paid it. Unfortunately, this bill still remains logged as being “in collection, unpaid” on my credit report. I discovered this on 7-9-07. My deadline to secure my loan is 8-3-07. After negotiating the customer service phone maze to talk to a human at Equifax and also having to provide my “confirmation number” for this privilege, I learned that it would be at least 45 days for my credit report to be corrected after I FAXed them a dispute letter and a copy of my cancelled check (dated 3-6-07) and initiated an “investigation” on line.
Here’s how the entire credit reporting industry exploits consumers: First, the means for obtaining the free credit report is in itself a labyrinthine process with numerous ways for consumers to inadvertently sign up for the so-called credit protection services in the process of trying to obtain their free credit report. Indeed, one of the first pages I encountered on Equifax’s website told me, “Our records indicate your current address is not in a state that is eligible for a free or reduced-fee credit file.” There is a button I can click to obtain my credit report for $10.00 using my credit card. A person unfamiliar with the fact that credit reports are supposed to be free in every state, might be duped into clicking the button. By actually calling Equifax I am given a URL (freecreditreport.com) where I can obtain my free credit report. Since most lenders don’t have time to go over your credit report with bean-counter precision—especially one like mine that is 30+ pages of on-time credit card and loan payments—all lenders really want is your FICO score. Another call to Equifax and I am given a “secret” URL that will get me my FICO score for only $7.00 and, without having to sign up for “credit protection”. While on hold I am assaulted with terrifying messages of the ravages of identity theft and how this can all be prevented with various credit protection products. Then there's the inconceivably bizarre situation that every time an organization (like a credit card company) requests access to your credit report, it dings your credit rating.
The credit reporting industry has found a gold-mine niche product of exploiting consumers’ fears of identity theft with their credit protection services. Indeed, how do I know, as a consumer, that Equifax did not remove the collection notice from my credit report in order to shock me into buying one of their products so that I would be “alerted” should it ever happen again. Plus, the real scam is that there are three reporting agencies and each one might have different and conflicting information. It’s like a mob shakedown to “protect” an urban business from future crimes, only with three different mobs requiring payment.
Credit reports and FICO scores should be free. Not just once a year, but whenever a consumer wants to check his or her credit for any “surprises”. This is critically important with the explosion of both identity theft by ever more clever thieves and inept billing departments. I was a victim of identity theft five years ago when I called my credit card company to request an increase in my credit limit. By providing my social security number I handed the likely minimum wage “customer service” representative the keys to my credit kingdom and within 24 hours my address was changed to one in Apple Valley, California and charges were piling up with computer equipment being shipped to that address. It was a nightmare to resolve. And 45 days to resolve a dispute when a consumer has proof of the inaccuracy is ridiculous, particularly with closing deadlines looming. Even the credit reporting process is a scam.
My mortgage company knows I’m a good credit risk because I’ve been with them for thirty years. However, they are a small company and can’t directly make the kind of loan I need so they have to farm it out to “investors’. Because I am self-employed and had a bad year last year nobody but nobody will lend money to me with a FICO score of less than 700. And here’s the real kicker: no exceptions, not for disputed medical bills; not for 30+ pages of on-time payments since 1978. And, no matter than I’m requesting a second mortgage of $65k when I have over $250k in equity. Nothing. Nada. Zip.
Essentially, tripping over a dog toy and injuring my knee had the effect of turning me from a financially respectable individual into a deadbeat.
BTW, any suggestions of how to get what is called a “no income” loan (for us weirdo self-employed types that make $70k one year and $20k the next, but always manage to meet our financial obligations) email me at ghostlady9@gmail.com.