As the credit bureaus computerized their processes and
greatly expanded their reach and influence in the late 1960s and early
1970s, consumer complaints began to pile up at the FTC and state attorney
generals' offices. The credit reporting agencies quickly became huge
bureaucracies second only in size to the federal government. Yet, the
credit bureaus expressly served only the needs of their clients,
the credit grantors.
Many consumers were negatively effected by the
credit bureaus, but they had no way to correct or change their credit
information. The American consumer lay completely at the mercy of the
credit bureaus. The United States Congress enacted the Fair Credit
Reporting Act (FCRA) in 1971 to insure that the credit bureaus investigate
the credit items disputed by consumers. This federal law set procedural
guidelines which gave the consumer the right to challenge the accuracy,
validity, and verifiability of the credit listings appearing in their
consumer credit report. It also required that the credit bureau repair any
credit listing if it was inaccurate or could not be verified.
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In theory, the FCRA charges the credit bureaus with
responsibility to the consumer as well as the credit grantor. In reality,
the credit bureaus resist, resent, and reject consumer disputes. The
credit bureaus would rather be left alone to make a profit. And, each time
a consumer challenges his credit, profit is lost.
The credit bureaus first defend their profits by
erecting walls of stall tactics, including requests for more information,
further clarification, and additional identification. The vast majority of
consumers give up before they even receive copies of their credit reports. |
If a consumer manages to get a credit report, decipher the codified
information, write a coherent dispute, and mail it, the bureaus may still
find some reason to disregard the challenge. The entire dispute system is
designed to frustrate and discourage the consumer.
Many consumers have the idea that the credit bureaus
must complete their investigation within thirty days or be forced to
remove all disputed information. They threaten to sue the credit bureaus
if they don't conclude their investigation in time and repair their
credit. In practice, such thinking is delusional. Nobody forces the credit
bureaus to do anything.
However, if you manage to submit a valid dispute
letter, and the credit bureau investigates your dispute, the chances of
success are good - whether or not the negative listings are accurate!
Accuracy actually has little to do with the deletion of negative items.
If a credit bureau cannot verify an item before
completing its investigation, that item will be removed. Many creditor
grantors are simply reluctant to take the time to verify the data. While
the credit bureaus may be in the business of reporting credit histories,
creditor grantors are not.
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