Two Major Credit Reporting Agencies Have Been Deceiving Us – Is Your Credit Score A Scam?
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By Isaac Davis
As the world is pressed ever closer to a cashless society, individual control over one’s own wealth will become a thing of the past and our personal finances will be lorded over by government and the ‘official’ agencies contracted to manage our financial lives. The pieces are already in place, as is evidenced by the ubiquitousness of credit reporting agencies; and in this brave new world your credit score will be even more important than it is now.
Managed by a handful of private companies and based on secret scoring processes, credit reports can have a dramatic impact on the financial prospects and overall lives of individuals and organizations. But though credit rating plays a necessary role in the overall banking system, the industry’s approach to assessing creditworthiness can harm both consumers and lenders. [Source]
Today, you cannot rent a place to live without a credit report, and if you try to sign your children up for the local soccer team you might even find yourself having to authorize a full credit check which will consult one of several major credit reporting agencies who keep track of your financial well-being.
This layer of financial oversight is a fairly new construct in our world, as noted by Credit Karma.
The Fair Credit Reporting Act, which first sought to regulate the reporting of credit information, was only passed through Congress in 1970. Furthermore, the FICO score as we know it today wasn’t introduced until 1989.
It turns out, however, that some of these institutions are defrauding the American public, as revealed by an investigation led by The Consumer Financial Protection Bureau, which found that two of the major credit reporting agencies have been deceiving Americans about the fees they charge and about the reports they provide.
“…the Consumer Financial Protection Bureau announced that two of the three major credit-reporting agencies responsible for doling out those scores—Equifax and Transunion—have been deceiving and taking advantage of Americans. The Bureau ordered the agencies to pay more than $23 million in fines and restitution.” [Source]
Furthermore, as explained by The Atlantic:
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