Curbing credit scores would give consumers power
Bill Moak, Consumer Watch 1:04 p.m. CDT May 26, 2016
Credit bureaus have long memories. As any consumer who’s tried to get a home loan with a less-than-stellar credit record knows, mistakes you made in the past can hang around like a ghost that never seems to go away. If you missed a credit card payment, racked up too much in debt compared to your income, or had garnishments, divorce, bankruptcies, liens or just made some questionable financial decisions, they can affect you for a decade or more. The credit score, used just about everywhere, takes all this into account and reduces you to a simple number.
For those deciding whether to grant someone credit, that number indicates just how good (or bad) a customer you’re likely to be, and they make decisions — unfairly or not — based on this simple, computer-generated number. And making it worse is the fact the credit rating is now used in a variety of situations far-removed from lending. Your credit score can keep you from getting a job, an apartment or good rates on insurance.
And, even though credit-scoring models take into account the passage of time, many consumer advocates say they are looking back too far. Credit bureaus have come under fire in the last couple of years for failing to correct erroneous information, making it difficult for people to remove negative information and even trying to upsell them with costly new products and services when they’re trying to dispute those errors.
http://www.clarionledger.com/story/...ll-moak-curbing-credit-scores-power/84909818/
Bill Moak, Consumer Watch 1:04 p.m. CDT May 26, 2016
Credit bureaus have long memories. As any consumer who’s tried to get a home loan with a less-than-stellar credit record knows, mistakes you made in the past can hang around like a ghost that never seems to go away. If you missed a credit card payment, racked up too much in debt compared to your income, or had garnishments, divorce, bankruptcies, liens or just made some questionable financial decisions, they can affect you for a decade or more. The credit score, used just about everywhere, takes all this into account and reduces you to a simple number.
For those deciding whether to grant someone credit, that number indicates just how good (or bad) a customer you’re likely to be, and they make decisions — unfairly or not — based on this simple, computer-generated number. And making it worse is the fact the credit rating is now used in a variety of situations far-removed from lending. Your credit score can keep you from getting a job, an apartment or good rates on insurance.
And, even though credit-scoring models take into account the passage of time, many consumer advocates say they are looking back too far. Credit bureaus have come under fire in the last couple of years for failing to correct erroneous information, making it difficult for people to remove negative information and even trying to upsell them with costly new products and services when they’re trying to dispute those errors.
http://www.clarionledger.com/story/...ll-moak-curbing-credit-scores-power/84909818/
