Almost everyone benefits from an accurate and efficient credit reporting system. If a credit report can be pulled that gives a complete and fair portrayal of a consumer’s abilities to repay his debt obligations then: credit is granted quickly, people have easier access to financing, businesses can efficiently assess the risks of granting credit, etc. We all saw a few years ago the devastating consequences and deflationary pressures of a ‘credit crunch’.
For our economy to run smoothly and money to flow quickly we need to make sure the credit reporting system is working and working right. But what if the system doesn’t live up to the hype? What if the major players have little to no interest (financially or otherwise) in maintaining accurate and complete data? How can the system be changed to protect the flow of credit/money in our economy while protecting the rights of those whose data is being compiled and sold without consent?
These are important questions that provide the background of the ongoing battle between the credit and consumer data industries, government regulators, consumer advocacy groups, and all the people in America with a credit report on them.
The Columbus Dispatch, a leading Ohio newspaper, recently published a multi-part series (after a one year investigation) relating to credit reports, their pervasive errors, and the often devastating consequences these have on everyday people. For more perspective and to see how the credit industry responds, TIME covers this subject and interviews the CEO of the Consumer Data Industry Association here.
See the main page of the Columbus Dispatch here.
The numerous complaints and the broken system they expose got the attention of a group of state attorney generals as well as the head of the Consumer Financial Protection Bureau himself, Richard Cordray. Hopefully with these parties stepping into the mix the credit reporting industry will be held more accountable and forced to truly report accurate, complete and verifiable data while performing real investigations when a dispute is raised.
Be sure to read the article here discussing the attorney generals’ involvement as well as a short interview with Richard Cordray.
Anyone with any familiarity with the credit reporting system knows that change is needed. Hopefully the government pressures will lead to true reform so that credit is granted to all fairly, accurately and efficiently, for this can only benefit us all.