WILL YOUR CREDIT SCORE EVENTUALLY CONTROL YOUR LIFE?

In a recent post about credit bureaus, we explored the fact that it is near-impossible to file a dispute with these organizations without undue stress and almost unlimited effort that often leads nowhere. The general consensus from comments on my blog in the past is that telephone calls go nowhere and written correspondence produces no results. Congress is looking at the problem but Congress looks at a lot of issues like this, and then does nothing about it. Business is in control of this country, and it is frighteningly becoming hopeless for the consumer to get the rights due them. MSN.com’s “Money Central” has an interesting article from the Christian Science Monitor, “Credit checks: A civil-rights issue?” which makes some pretty good points on the subject. Foremost is that research has found no link between poor credit and job performance, yet many employers use credit reports in deciding whether or not to hire employees. A lot of the interest has been directed toward minorities which is probably justified, but the total population suffers when it comes to the accuracy of these reports. In a 2004 study by Public Interest Research Group, one of the country’s leading privacy advocates, they found 54 percent of credit reports had mistaken personal information, 25 percent with errors that could result in denial of credit…or a job. I could rest my case right there but household and auto insurance are another case for concern in this issue. Many insurance companies use credit reports to determine your insurance rates. The Motley Fool has a good article that inquires into what bad credit has to do with driving. As a junk mail data broker, I specialized in auto insurance at one time, and watched the industry move from lists that performed very profitably to credit related lists touted by TransUnion, one of the big three credit bureaus. From an inside perspective, what worried me most was that, rather than confirming those with low credit scores had more accidents, what the insurance companies were shooting for was the fact that people with these low scores filed more complaints. And why not—assuming they were justified—since they probably didn’t have the money for the repairs like higher scores with more available credit. On the other hand, those who could afford to pay might prefer to do so rather than have a claim on their record. In this case, it might be considered a case for civil rights action, and it would be great to hear from attorneys on this issue. In any case, if you really want to dig into the subject further, look at the Insurance Information Institute’s site on “Credit Scoring” for an in-depth look. Whatever the future is for using credit reports to determine certain aspects of the consumer’s life, they’d better clean up their act, or they could find their backs up against the wall like ChoicePoint.