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| Readers react: Credit reporting system stinks!
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| My wife and I have always had
an excellent credit rating. Yet, I do not like the way they hold on to past accounts.
Example: We moved from South Dakota to Florida four years ago and closed a number
of accounts from the banks we dealt with. We started over with a new bank yet
four years later, those bank accounts still remain on our credit reports -- and,
it seems, they are used against us when trying to obtain credit. All accounts
show up as closed on our reports but we have noticed some companies or institutions
see a long list of accounts and apparently do not see if they are closed or not.
We have had to write to each of the credit reporting agencies so there is a written
record from us about our situation, but we should not have to do this. The burden
of proof should really be upon the credit reporting agencies as well as the institutions
putting information into the credit reports. There are a lot of things wrong with
how these agencies are allowed to place information into the reports and then
it rests upon the individual to rectify it, when the fault lies with the reporting
agency and/or the institutions giving them the information. You can be penalized
if you have too many credit card accounts and you can be penalized if you have
too few, along with the amounts on those accounts -- it can be too much or too
little and decisions are made about the individual based on a "one size fits
all" philosophy and we find that to be preposterous, unfair and cruel because
it can mean the difference, in some cases, about one's financial future. --
J.S.
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My credit was great with a FICO
score of 806. I buy, fix up and rent or sell older homes part time
and enjoyed the lowest mortgage rates. I had just checked my credit
back in April of 2005 and all was fine. I went to a local bank to
refinance a piece of rental property in late July and received the
shock of my life -- a score of 680. Ten accounts had been opened
that were not mine in two months and all were maxed out to the tune
of $40,000. Not only that, but 57 hard-pull credit inquiries were
made. The sad part to this story is I had a fraud alert placed on
my credit file in November of 2004 with all three bureaus, which
is supposed to stop all preapproved offers. I did this because I
found preapproved offers for me in the mail box of one of my vacant
properties. I later discovered that this fraud alert was only good
for 90 days; however TransUnion still has it in effect. This is
a nightmare as my insurance rates are now rising due to the change
in my credit history with the October 2005 renewal that's here,
and I will have to pay higher mortgage rates for properties until
this is cleared. I would like to point out that identity theft is
extremely difficult to resolve, credit card companies aren't willing
to cooperate fully, local law enforcement doesn't have time, and
it takes a mountain of paperwork, phone calls, etc. to get the ball
rolling to clear it. -- R.R.
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Apparently, the powers to be feel that the benefits
of being able to grant credit quickly and impartially outweigh the
benefits of accuracy. That's the way I feel about the entire system
anyway. The credit scoring system presumes that we're all "average"
Americans when it comes to debt and bill-paying. It does not take
into consideration variances in income or net worth. I personally
am on the higher end of the spectrum when it comes to both income
and net worth, and I suffer routinely because my debt level is considered
too high. For example, the system doesn't see that I only charge
my monthly expenses which are repaid in full every month OR that
occasionally I will take advantage of either zero-percent or very
low (up to 2 percent) interest offers and roll a balance which costs
me nothing or next to nothing. I am a CPA and CFP by profession,
and I know that if the system better reflected true ability to repay,
my score would be much higher. -- C.W.
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I have tried very hard to improve my credit,
but it's very hard to get the credit bureaus to report correct information.
I even tried contacting the FTC about it and nothing. I had settled
an account with one of my creditors and they are still reporting
incorrect information, and when you call them they say, "It's
not us it's the credit bureau," and so forth. So, who can you
really get to help you? I once hired a so-called credit repair company,
not to try to get them to remove anything that was reported correctly
but to get them make sure that what was incorrect to get removed
or corrected and nothing. I'm just out $400. -- B.B.
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As a branch manager of a mortgage/finance
company I could tell you stories about inaccurate credit reports
that would make you hair curl! Consumers should know that starting
in 2005 credit cards are now reporting balances, monthly payment
and late payments to individuals credit reports even if they are
only an "authorized user." One recent example: A customer
who had been authorized to use her company credit card to order
office supplies, etc., came to me to refinance her primary residence.
There was an entry on her credit report showing a credit card with
a $21,000 balance and a $525 monthly payment. It took her nearly
a month to get the proper documentation so that her "office"
expenses were not used in the mortgage qualification process. The
moral of the story is that everyone should be extremely careful
in telling their husbands, wives, children, bosses or anyone that
it is OK to put their name on an account as an authorized user unless
it is absolutely necessary! It takes a lot of time and patience
to have your name removed from an account or deleted from your credit
report and in some instances I am sure that that are people who
have been denied credit or had rates quoted to them which were higher
than necessary because of these "authorized user" entries.
-- M.B.
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