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The Law is on Your Side
Many consumers have the mistaken idea that credit bureaus
are federally supported organizations backed by a vast array of laws meant
to protect creditors. Nothing could be further from the truth. Aside from
the government simply recognizing the need for credit reporting, credit
bureaus have absolutely nothing to do with the government. Credit bureaus
are simply huge bureaucratic companies which exist for the soul purpose of
making money by selling information about you-information they never
bothered to verify.
Because of the vast potential for error in the credit reporting system, the
United States Congress has enacted laws to protect the consumer from being
victimized by the credit bureaus. It is your right and responsibility to
make use of these laws.
The Law versus Practical Reality
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 mount at the FTC and state attorney
general offices. The credit reporting agencies quickly became huge
bureaucracies second only in size to the federal government. The credit
bureaus expressly served only the needs of their clients, the credit
grantors. Many consumers were negatively affected 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 delete 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. 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.
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 are
in the business of reporting credit histories, creditor grantors are not.
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