The three credit bureaus in the US holds the power of everyones life in their hands. They are highly unregulated and when there is an error in their reporting, it is a tedious and often unsuccessful process to get it corrected or removed.
First, there are some rules of an unexplainable oppressive nature that exist within the credit bureau system. Although it is nice to have a good credit rating and take advantage of the perks, it does not work for many people who struggle to pay their bills. In fact, it can become just another tool to keep underserved and economically challenged people destabilized and stagnant, due to its rigidity and power.
As written in a previous blog article, it is unlikely that most people from the above communities even knew of the importance of good credit rating, how to attain it and the impact of bad credit prior to an application rejection due to insufficient or bad credit. Hence, the lack of education of credit bureaus is still a major reason it hurts people and works against not for them. Credit education needs cultural incorporation.
The unyielding power of credit bureaus: who gets funding or access to housing, cars and everything else in a system that is built on attainment of life style and economic empowerment through one’s ability to create and then pay back debt. Good credit is the vein in this system. This embodiment of excessive power is something that needs policy addressing.
An example of empowerment: when a credit bureau drops a credit score because a hard credit was pulled, why is that even allowed? Pulling a credit report should have no consequence on a person’s credit score, definitely not the pulling of one single request. What is the wrong doing deserving of penalty? They don’t even set it at 3 credit pulls; no, one hard pull and down goes ones credit score.
Another note is the length of time these bureaus keep a paid, but previously reported, debt as a negative on a credit report. This time frame can be up to 7 years even if the debt was a $50 medical bill. They are merciless and could care less that it was medically related. Down goes the almighty credit score. Should medical bills even be penalized or reported?
While some credit bureau measures must be in place to weed out potential habitual irresponsibility, the draconian powers and practices of the credit bureau system far outweighs that benefit.