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It's important to realize that the credit monitoring services you can buy are provided by the credit companies. The same company, which may at times make false

It's important to realize that the credit monitoring services you can buy are provided by the credit companies. The same company, which may at times make false claims about you, is in possession of a service / technology they claim can detect those false claims. Why is it not libel when these companies make false claims about me? Especially when they advertise that they have the ability to detect such false claims? "Pay us and we will not make false claims about you" they say. "Pay us and we'll double check with you before making claims we believe to be suspicious about you."

fedorareis 6y ago
Disclaimer, I work at TransUnion but the following is based on my experience as a consumer. Since I’m seeing a lot of confusion about how credit reporting is done and how credit monitoring services work let me break it down a bit. Let's say you are getting a new credit card with Chase Bank. When you apply for that credit card Chase does a hard inquiry on your credit report to decide if you are elligible for that card and what credit limit they are going to give you. If they then issue you a card they then report to the credit bureaus that you opened a new line of credit with them and the limit on that line of credit. If you have credit monitoring you would get 2 notifications. You would get a notification that a hard inquiry was made on your credit report and a second saying a new line of credit was issued to you. The point of credit monitoring isn't for the bureau to catch mistakes but for you to be aware of activity that could negatively impact your credit score. The bureau has no way of knowing if something was legitimate or not since they only have the information that was reported to them. Credit monitoring does however let you know something major happened to your credit which means you now have the ability to respond to that knowledge. There are 2 important things to remember, all 3 credit bureaus are legally required to give you 1 free credit report per year at your request. You can get it online from https://www.annualcreditreport.com/index.action https://www.annualcreditreport.com/index.action or the FTC has instructions https://www.consumer.ftc.gov/articles/0155-free-credit-reports https://www.consumer.ftc.gov/articles/0155-free-credit-repor... if you want to request it by mail. I have heard a lot of people suggest that consumers should space out requesting the 3 free credit reports so they get one about every 4 months and use that as a form of credit monitoring. It isn't completely fullproof since lenders aren't required to report to all bureaus so something could show up on only 1 report and not the other 2. The second important thing to know is that bureaus are legally required to allow consumers to dispute items on their credit report. The FTC has a sample dispute letter you can use to file a dispute, but some if not all of the bureaus have ways to file disputes online. As someone else in this thread mentioned these disputes generally require some sort of evidence that the reported item is incorrect. So say I get a credit monitoring alert that says my address has changed because some creditor reported my information incorrectly. Regardless of any other steps I should get that resolved with the creditor because it will probably keep causing issues. But I could then file a dispute with the credit bureau(s) saying that the address is incorrect which would probably require a bill or something to prove my current address (similar to how some state DMVs prove you are a resident).
toomuchtodo 6y ago
The answer is, of course, regulation. To fix this will require more regulation. Contact your Congressional representatives. [1] The CFPB can enforce upgraded financial services policy in this regard once the legislation is enacted. Complaining to them today about this specific security failing is also likely helpful [2]. Freezes and thaws are free. Your credit report, and any scoring mechanisms (FICO), should be available to consumers at any time free of charge. Credit monitoring products should be outlawed. Failures to safeguard citizen data (Equifax) or to promptly remove inaccurate data should incur steep financial penalties. [1] https://www.govtrack.us/congress/members https://www.govtrack.us/congress/members ("Use GovTrack to find out who represents you in Congress, what bills they have sponsored, and how they voted.") [2] https://www.consumerfinance.gov/complaint/ https://www.consumerfinance.gov/complaint/
- mdm12 6y ago
  Speaking of regulation, Biden apparently expressed interest in a federal credit bureau under the CFPB https://finance.yahoo.com/news/biden-wants-shut-down-credit-195528426.html https://finance.yahoo.com/news/biden-wants-shut-down-credit-...
  - toomuchtodo 6y ago
    Cautiously optimistic. Having had to advocate for folks who were flagged by CAIVRS [1] (from an FHA mortgage foreclosure), I would support such a mechanism if it had robust transparency around its operation and exception handling mechanisms for those caught at the edges of the gears (which CAIRVRS, an existing federal credit and debt default data system, does not). Any solution must suck less than current government and private credit reporting agency systems. [1] https://www.hud.gov/program_offices/housing/sfh/caivrs https://www.hud.gov/program_offices/housing/sfh/caivrs ("The Credit Alert Verification Reporting System (CAIVRS) is a Federal interagency database that contains the following: Delinquent debt information from the Departments of Housing and Urban Development, Agriculture, Education, and Veterans Affairs and the Small Business Administration.") Sidenote: The above systems is ripe for overhaul by the US Digital Service. It is a pathetically old mainframe system with limited operational hours (and takes federal holidays off), when it could be a PostgreSQL database (or similar relational db) with an API.
mulmen 6y ago
IANAL so maybe this is hyperbolic but it smells like extortion to me.
- vkou 6y ago
  It's not extortion, because the credit agencies don't want anything from you. If you could fix a bad credit score by wiring Experian $50, that would be extortion.
  - zeusk 6y ago
    which is essentially what's happening here? Something they know is potentially dubious is negatively affecting your score but you need to subscribe to their service to have it actively reviewed.
    - vkou 6y ago
      You can get a credit report for free from them, and they don't charge you anything to contest an incorrect claim against you. This is a cost center for them, not a profit center. Their core business would be compromised if you could just bribe them to fix your credit score.
  - mulmen 6y ago
    Ok but can't you do exactly that? And how is it different if by paying for "credit monitoring" they make fewer "mistakes"? Isn't that just a protection racket? "Nice credit score, it would be a shame if something happened to it."
    - tialaramex 6y ago
      No. You can give the CRA money, and they will take it, gladly, but this doesn't change the credit data they hold about you, which says (for example) that you skipped out on all the utility bills at a place you owned 18 months ago. I've sat in on calls from consumers to a CRA when I worked there. The typical thrust of the call is that the caller believes they are a good person and so the records of them doing stuff creditors won't approve of should be purged, the CS agent explains that they can purge anything if the consumer sends them proof it is wrong, for example if the record says somebody went to County Court and secured a judgement against them for £800 then a letter from the court saying "Whoops, our bad, we wrote Michael Smith, 43 from Leicester in this judgement but we meant somebody else entirely" will get that erased from their record. But just calling and moaning about how you really wanted to buy a new car but your credit is bad doesn't change anything. I didn't see any sign there was a way to short cut any of this by paying for credit reports. I guess if you don't remember all the times you didn't pay your bills then a web site that lists them is handy? But that seems like that's on you. I actually had reports from all the big CRAs in my country, and the best ones (with the most comprehensive coverage, so, Experian, who also happened to be my employer at the time) basically just say this guy seems to pay for some basic utillities and he pays on time. And that's it. The worst ones are like "This guy exists, and we don't have good data so shrug". The best way to begin "fixing" your credit? Which all of these companies will recommend, but it's no big secret at all? Register to vote. Creditors prefer to lend to people who actually exist. Governments don't want people who don't exist voting. So register to vote and immediately confidence that you're actually a real person, with a postal address, shoots up. The next step is easy for me but apparently lots of people find it almost impossible. Pay bills! Got a phone? Agree to pay the phone company to use the phone and then... actually pay them for it. Again, your credit worthiness shoots up because creditors want to get paid, and showing you have some idea how to actually do that part is a good sign. Now, if you're trying to persuade somebody to lend you Ferrari 488 money on a Fiat Uno income, those two basic tips won't get you there. You're going to need to learn how to manage exactly the right levels of debt, what's recorded and what isn't, lots of tricks. But I assure you that you aren't going to learn that stuff by paying a CRA, because it's like learning how to clip out of bounds in a video game, the designers of the game don't even understand it well.
economusty 6y ago
They don't make the claims, they provide a database where others can record claims. The difference is important.
temporallobe 6y ago
This is like how those horrible antivirus programs for Windows would constantly warn you that you might have viruses and nag you to subscribe to and pay for their services or your system could be at serious risk. I always thought these companies made at least some of the viruses themselves in an effort to self-perpetuate.
olliej 6y ago
I would call it extortion: pay for our service or we'll screw up your life

fedorareis 6y ago

Disclaimer, I work at TransUnion but the following is based on my experience as a consumer. Since I’m seeing a lot of confusion about how credit reporting is done and how credit monitoring services work let me break it down a bit. Let's say you are getting a new credit card with Chase Bank. When you apply for that credit card Chase does a hard inquiry on your credit report to decide if you are elligible for that card and what credit limit they are going to give you. If they then issue you a card they then report to the credit bureaus that you opened a new line of credit with them and the limit on that line of credit. If you have credit monitoring you would get 2 notifications. You would get a notification that a hard inquiry was made on your credit report and a second saying a new line of credit was issued to you. The point of credit monitoring isn't for the bureau to catch mistakes but for you to be aware of activity that could negatively impact your credit score. The bureau has no way of knowing if something was legitimate or not since they only have the information that was reported to them. Credit monitoring does however let you know something major happened to your credit which means you now have the ability to respond to that knowledge. There are 2 important things to remember, all 3 credit bureaus are legally required to give you 1 free credit report per year at your request. You can get it online from https://www.annualcreditreport.com/index.action https://www.annualcreditreport.com/index.action or the FTC has instructions https://www.consumer.ftc.gov/articles/0155-free-credit-reports https://www.consumer.ftc.gov/articles/0155-free-credit-repor... if you want to request it by mail. I have heard a lot of people suggest that consumers should space out requesting the 3 free credit reports so they get one about every 4 months and use that as a form of credit monitoring. It isn't completely fullproof since lenders aren't required to report to all bureaus so something could show up on only 1 report and not the other 2. The second important thing to know is that bureaus are legally required to allow consumers to dispute items on their credit report. The FTC has a sample dispute letter you can use to file a dispute, but some if not all of the bureaus have ways to file disputes online. As someone else in this thread mentioned these disputes generally require some sort of evidence that the reported item is incorrect. So say I get a credit monitoring alert that says my address has changed because some creditor reported my information incorrectly. Regardless of any other steps I should get that resolved with the creditor because it will probably keep causing issues. But I could then file a dispute with the credit bureau(s) saying that the address is incorrect which would probably require a bill or something to prove my current address (similar to how some state DMVs prove you are a resident).

toomuchtodo 6y ago

The answer is, of course, regulation. To fix this will require more regulation. Contact your Congressional representatives. [1] The CFPB can enforce upgraded financial services policy in this regard once the legislation is enacted. Complaining to them today about this specific security failing is also likely helpful [2]. Freezes and thaws are free. Your credit report, and any scoring mechanisms (FICO), should be available to consumers at any time free of charge. Credit monitoring products should be outlawed. Failures to safeguard citizen data (Equifax) or to promptly remove inaccurate data should incur steep financial penalties. [1] https://www.govtrack.us/congress/members https://www.govtrack.us/congress/members ("Use GovTrack to find out who represents you in Congress, what bills they have sponsored, and how they voted.") [2] https://www.consumerfinance.gov/complaint/ https://www.consumerfinance.gov/complaint/

mdm12 6y ago
Speaking of regulation, Biden apparently expressed interest in a federal credit bureau under the CFPB https://finance.yahoo.com/news/biden-wants-shut-down-credit-195528426.html https://finance.yahoo.com/news/biden-wants-shut-down-credit-...
- toomuchtodo 6y ago
  Cautiously optimistic. Having had to advocate for folks who were flagged by CAIVRS [1] (from an FHA mortgage foreclosure), I would support such a mechanism if it had robust transparency around its operation and exception handling mechanisms for those caught at the edges of the gears (which CAIRVRS, an existing federal credit and debt default data system, does not). Any solution must suck less than current government and private credit reporting agency systems. [1] https://www.hud.gov/program_offices/housing/sfh/caivrs https://www.hud.gov/program_offices/housing/sfh/caivrs ("The Credit Alert Verification Reporting System (CAIVRS) is a Federal interagency database that contains the following: Delinquent debt information from the Departments of Housing and Urban Development, Agriculture, Education, and Veterans Affairs and the Small Business Administration.") Sidenote: The above systems is ripe for overhaul by the US Digital Service. It is a pathetically old mainframe system with limited operational hours (and takes federal holidays off), when it could be a PostgreSQL database (or similar relational db) with an API.

mulmen 6y ago

IANAL so maybe this is hyperbolic but it smells like extortion to me.

vkou 6y ago
It's not extortion, because the credit agencies don't want anything from you. If you could fix a bad credit score by wiring Experian $50, that would be extortion.
- zeusk 6y ago
  which is essentially what's happening here? Something they know is potentially dubious is negatively affecting your score but you need to subscribe to their service to have it actively reviewed.
  - vkou 6y ago
    You can get a credit report for free from them, and they don't charge you anything to contest an incorrect claim against you. This is a cost center for them, not a profit center. Their core business would be compromised if you could just bribe them to fix your credit score.
- mulmen 6y ago
  Ok but can't you do exactly that? And how is it different if by paying for "credit monitoring" they make fewer "mistakes"? Isn't that just a protection racket? "Nice credit score, it would be a shame if something happened to it."
  - tialaramex 6y ago
    No. You can give the CRA money, and they will take it, gladly, but this doesn't change the credit data they hold about you, which says (for example) that you skipped out on all the utility bills at a place you owned 18 months ago. I've sat in on calls from consumers to a CRA when I worked there. The typical thrust of the call is that the caller believes they are a good person and so the records of them doing stuff creditors won't approve of should be purged, the CS agent explains that they can purge anything if the consumer sends them proof it is wrong, for example if the record says somebody went to County Court and secured a judgement against them for £800 then a letter from the court saying "Whoops, our bad, we wrote Michael Smith, 43 from Leicester in this judgement but we meant somebody else entirely" will get that erased from their record. But just calling and moaning about how you really wanted to buy a new car but your credit is bad doesn't change anything. I didn't see any sign there was a way to short cut any of this by paying for credit reports. I guess if you don't remember all the times you didn't pay your bills then a web site that lists them is handy? But that seems like that's on you. I actually had reports from all the big CRAs in my country, and the best ones (with the most comprehensive coverage, so, Experian, who also happened to be my employer at the time) basically just say this guy seems to pay for some basic utillities and he pays on time. And that's it. The worst ones are like "This guy exists, and we don't have good data so shrug". The best way to begin "fixing" your credit? Which all of these companies will recommend, but it's no big secret at all? Register to vote. Creditors prefer to lend to people who actually exist. Governments don't want people who don't exist voting. So register to vote and immediately confidence that you're actually a real person, with a postal address, shoots up. The next step is easy for me but apparently lots of people find it almost impossible. Pay bills! Got a phone? Agree to pay the phone company to use the phone and then... actually pay them for it. Again, your credit worthiness shoots up because creditors want to get paid, and showing you have some idea how to actually do that part is a good sign. Now, if you're trying to persuade somebody to lend you Ferrari 488 money on a Fiat Uno income, those two basic tips won't get you there. You're going to need to learn how to manage exactly the right levels of debt, what's recorded and what isn't, lots of tricks. But I assure you that you aren't going to learn that stuff by paying a CRA, because it's like learning how to clip out of bounds in a video game, the designers of the game don't even understand it well.

economusty 6y ago

They don't make the claims, they provide a database where others can record claims. The difference is important.

temporallobe 6y ago

This is like how those horrible antivirus programs for Windows would constantly warn you that you might have viruses and nag you to subscribe to and pay for their services or your system could be at serious risk. I always thought these companies made at least some of the viruses themselves in an effort to self-perpetuate.

olliej 6y ago

I would call it extortion: pay for our service or we'll screw up your life