5 ms·

The biggest problem, imho, is that there's no incentive for the credit rating agencies to care about accuracy. I paid for 30 days access to check my credit rep

by kareemm 16y ago

The biggest problem, imho, is that there's no incentive for the credit rating agencies to care about accuracy. I paid for 30 days access to check my credit report a few months ago and I had to fix a whole slew of errors dating back almost 10 years. When I followed up to see if they had fixed the errors, I was told that since 30 days had passed, I had to pay again to get an updated look at my credit report. Talk about messed up incentives.

TheAmazingIdiot 16y ago
Then I fail to understand why we cant go after the Big 3 using libel laws. It's one thing to say somebody is a smelly, poop-eating mongrel vs child rapist. One is an opinion and the other is a provable statement of fact. If, in fact, the child rapist epithet is false, it's libel. Now, these companies are selling rights to loans, along with your information and a formula they use to equate it all. If the information is just not true and affects you negatively, "sue the bastards".
- pragmatic 16y ago
  It might be because you agree to the credit bureau being used (you usually sign something) and the company pulling it pays for it. It's not published in a public place so libel wouldn't apply (my guess anyway). Now if they put it up in the local bar (like bad checks used to be before they cracked down) then you might have a case.
jerf 16y ago
According to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm , credit reports for the purpose of determining if accuracy changes have been made do not count as the yearly report. However, bear in mind that covers the report of the raw data. The credit score itself is not covered by that report, and they can make you pay again for that. I don't think knowing their exact score is all that useful, compared to making sure their data is accurate.
pragmatic 16y ago
The big 3 are required to give you a free credit report once a year by law. There is also a dispute mechanism for each of them. Were you not able to use this or was this in addition to that? (Yeah it's messed up).
- kareemm 16y ago
  I'm in Canada; I don't believe we've got a free credit report law here. And based on their response, after I resolved a dispute, I still had to pay to find out the outcome.
  - JimmyL 16y ago
    We do - see details at http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html. You don't get the score for free, but you do get a copy of your report (all the things listed on there that go into the calculation of the score).
amalcon 16y ago
I think the real issue is that we're trying to use a single number (well, three numbers, but they all purport to mean the same thing) as a predictor of whether or not an individual will pay back any given loan (or continue to pay any given bill). The lenders (or, specifically, their employees) want a single number because they want a single thing they can point to when asked to explain their decision. "How could I have expected him to default? His FICO was 750!" Imagine if we tried to apply this approach to other areas. For corporations, instead of reporting total assets, total liabilities, earnings, payments, and such, they instead give all this information to an "Accounting Disclosure Bureau", who produces an "Expected Profitability Index" based on those numbers. While the report contains other information as well, people usually just look at the EPI. Would that be a functional investment climate?
- grandalf 16y ago
  This is a great point. In the recent past, many people's credit scores were artificially inflated due to the low perception of systemic risk in the economy. Now that that risk is better understood, the same person who had a 750 score might have a 650 score, etc., even if all payments have been made on time. I'm curious about the incentive this creates. Suppose someone had a score of 680 and was paying everything on time and had $5000 of available credit. Now, he/she has a score of maybe 640 and no available credit. What is the benefit to this person of continuing to care about any no-recourse debts in this case? He/she might imagine paying the debt off over 5 years as originally planned, or may consider abandoning/defaulting on the debt and saving the money instead, which would improve the person's financial picture over the next 5 years, and by 7 years out the default would be expunged anyway.
Qz 16y ago
quizzle.com gives you a 100% free credit score check every 6 months. I'm not sure if its the same level of access you're talking about, but it really is free, as opposed to all the commercials you seen on TV. It's like mint.com, they fund it by trying to hook you up with service offers.
- adammichaelc 16y ago
  There's also http://creditkarma.com http://creditkarma.com, which allows you to check your Transunion-based creditkarma version of your credit score. Note that it's not actually your credit score, but an estimate based on all the information Transunion provides (debts, % of monthly payments made, debt utilization ratios, etc.). You can check it as many times as you want, and it doesn't hurt your credit score. It doesn't count as a "hard inquiry," but as a "consumer inquiry," so it doesn't count against you.

by kareemm 16y ago

TheAmazingIdiot 16y ago

Then I fail to understand why we cant go after the Big 3 using libel laws. It's one thing to say somebody is a smelly, poop-eating mongrel vs child rapist. One is an opinion and the other is a provable statement of fact. If, in fact, the child rapist epithet is false, it's libel. Now, these companies are selling rights to loans, along with your information and a formula they use to equate it all. If the information is just not true and affects you negatively, "sue the bastards".

pragmatic 16y ago
It might be because you agree to the credit bureau being used (you usually sign something) and the company pulling it pays for it. It's not published in a public place so libel wouldn't apply (my guess anyway). Now if they put it up in the local bar (like bad checks used to be before they cracked down) then you might have a case.

jerf 16y ago

According to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm , credit reports for the purpose of determining if accuracy changes have been made do not count as the yearly report. However, bear in mind that covers the report of the raw data. The credit score itself is not covered by that report, and they can make you pay again for that. I don't think knowing their exact score is all that useful, compared to making sure their data is accurate.

pragmatic 16y ago

The big 3 are required to give you a free credit report once a year by law. There is also a dispute mechanism for each of them. Were you not able to use this or was this in addition to that? (Yeah it's messed up).

kareemm 16y ago
I'm in Canada; I don't believe we've got a free credit report law here. And based on their response, after I resolved a dispute, I still had to pay to find out the outcome.
- JimmyL 16y ago
  We do - see details at http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html. You don't get the score for free, but you do get a copy of your report (all the things listed on there that go into the calculation of the score).

amalcon 16y ago

I think the real issue is that we're trying to use a single number (well, three numbers, but they all purport to mean the same thing) as a predictor of whether or not an individual will pay back any given loan (or continue to pay any given bill). The lenders (or, specifically, their employees) want a single number because they want a single thing they can point to when asked to explain their decision. "How could I have expected him to default? His FICO was 750!" Imagine if we tried to apply this approach to other areas. For corporations, instead of reporting total assets, total liabilities, earnings, payments, and such, they instead give all this information to an "Accounting Disclosure Bureau", who produces an "Expected Profitability Index" based on those numbers. While the report contains other information as well, people usually just look at the EPI. Would that be a functional investment climate?

grandalf 16y ago
This is a great point. In the recent past, many people's credit scores were artificially inflated due to the low perception of systemic risk in the economy. Now that that risk is better understood, the same person who had a 750 score might have a 650 score, etc., even if all payments have been made on time. I'm curious about the incentive this creates. Suppose someone had a score of 680 and was paying everything on time and had $5000 of available credit. Now, he/she has a score of maybe 640 and no available credit. What is the benefit to this person of continuing to care about any no-recourse debts in this case? He/she might imagine paying the debt off over 5 years as originally planned, or may consider abandoning/defaulting on the debt and saving the money instead, which would improve the person's financial picture over the next 5 years, and by 7 years out the default would be expunged anyway.

Qz 16y ago

quizzle.com gives you a 100% free credit score check every 6 months. I'm not sure if its the same level of access you're talking about, but it really is free, as opposed to all the commercials you seen on TV. It's like mint.com, they fund it by trying to hook you up with service offers.

adammichaelc 16y ago
There's also http://creditkarma.com http://creditkarma.com, which allows you to check your Transunion-based creditkarma version of your credit score. Note that it's not actually your credit score, but an estimate based on all the information Transunion provides (debts, % of monthly payments made, debt utilization ratios, etc.). You can check it as many times as you want, and it doesn't hurt your credit score. It doesn't count as a "hard inquiry," but as a "consumer inquiry," so it doesn't count against you.