The Truth About Credit And Credit Repair Laws That Credit Bureaus and Debt Collectors Do Not Want You To Know!

If you are in the no man’s land of having negative items on your credit report, one of the best explanations of the ethics of removing negative entries is the following article written by an attorney: “Credit Repair” has not been kind to the American consumer. In fact, the phrase is synonymous with fraud. This is the stigma we face as we offer a client an alternative to credit prison.” Because the nasty reputation of credit repair sometimes washes over into our business, we are called upon to defend the ethics of our service.

Removing record of a negative credit account, which did actually exist, is undoubtedly ethically sound. We belong to a fundamentally capitalistic civilization and the credit bureaus capitalize on consumer information.

Unlike our legal system, credit reporting firms take no oath to truth, equity and the common good. No American has the moral obligation to support any business venture or corporation, much less a corporation which may well destroy their financial life. The information reported by the credit bureaus is ethically “up for grabs.”

The credit bureaus would maintain every piece of credit information forever if it weren’t for federal law which has directed them to remove most items after seven years. Under the law, the credit bureaus themselves practice credit repair, basically at the seven year mark. If it is right to remove accurate credit entries after seven years, why would it be wrong to do so in less time?

In relationship to the consumer, the credit bureaus do not concern themselves with the impact, or accuracy, of the information they give out. This information often misrepresents the credit worthiness of the consumer. By tagging good citizens as “deadbeats” the bureaus damage the creditors, the economy and, most importantly, the individual. Numerous policies and techniques employed by the credit bureaus appear quite harmful to the American consumer. These policies and techniques are the basis and justification of our opposition to the present credit reporting system.

Seven years (10 years for bankruptcy and some court accounts) credit bondage penalizes the debtor unjustly. At no point have the credit bureaus ever conducted a study determining seven years to be the point of deadbeat rejuvenation.

The seven year mark is entirely arbitrarily. In fact, Dr. Bonnie Gution, adviser to President Bush on consumer affairs, remarked, “…it is our understanding that computer models that predict credit worthiness find most information that is more than two years old nonessential.”

Based on experience with clientele, seven years is truly too long. Within a year or two, most consumers completely recover from an economic crisis. For the remaining five or six years, they are handicapped; forced to rent homes, pay outrageous interest on high risk auto loans, forgo the convenience of credit cards and pay cash for every expenditure.

Removing the consumer from the credit loop causes the economy to suffer. Our clients come to us on the financial upswing. These are consumers fully recovered from crisis, re-engaged to financial responsibility and anxious to reenter the credit economy. For them, we offer a deserved release from the credit prison which they entered as their financial world fell apart.

The credit bureaus have not been able to maintain reasonable accuracy in their credit profiles. The bureaus claim an error ratio under 1 percent. In reality, studies conducted by neutral third parties have determined the credit report error ratio to be closer to 40 percent.

Unfortunately for the consumer, the credit bureaus choose to err on the side of negative information. As clients’ files have passed through our offices, we have noticed a high incidence of file mergers—the worst kind of file error. In a file merger, the credit of another person with a similar name is spread onto the file of the blameless bystander. Thankfully, using the current laws, the credit bureaus can be forced to correct these obvious errors.