We have a credit reporting problem in America. It is a systemic problem, in that the people, that’s you and me as consumers, do not understand this incredibly complex system that, as a byproduct of the system, is designed to keep people in the dark.

There was a recent report written by Aaron Klein from the Brookings Institution late last year. In it he states “Policymakers need to resist the headlines and focus on the real problem that directly harms millions of Americans: the astounding number of errors in the credit reports that are the result of misaligned economic and legal incentives.”

Weather meteorologists and forecasters have a better success rate predicting weather than Experian, Equifax, and Trans Union getting it right.

Their argument is that they are only entering information about you that your creditors give to them. According to the law, the bureaus are correct. Technically, a creditor does not violate the law if they have incorrect information about you on the credit report:  you are.

That is why it is vital everyone must evaluate their own credit reports at a minimum of once per year to make sure that it is pure, clean, correct and up-to-date.

Even if you do not use credit, you can be abused by companies, particularly the insurance industry, that use the credit reporting system. Even if you have no credit score and have no credit, insurance companies for home and auto insurance can raise your rates precipitously high. This has nothing to do with your accident rate or age: it can be simply for not having a credit score.

As Aaron Klein states, “with money on the line, you might assume that the credit reporting system would fix the problem. In reality, it is the opposite. Speed and volume are favored over accuracy. Large-scale inaccuracies are tolerated. The cost of correcting the data outweighs benefits – for the credit bureaus, though, not the consumers.”

The goal of the credit bureaus as, for-profit companies, is to make money. If they keep the truth about credit and credit scoring from you, it’s hard to object when you do not have the knowledge.

And the other factor is credit scores.  You want to talk about confusion? Let’s take a look at CreditKarma.com for example. “What is your credit score?”  Here is a fact: you do not have a credit score:  you have many.  In fact, you have over 100.  And Credit Karma doesn’t use the FICO scoring system:  it uses a system called Vantage score.

Problem is, data indicates that 90 to 95% of all credit decisions are made using the FICO score.

I think I have made my point.  But I will go one step further: the mortgage market. The mortgage market does not use the most up-to-date scoring system : the FICO 9.    In fact, all three bureaus use different FICO scoring models: FICO 4, FICO 2, and FICO 5.The reason?  Fannie Mae and Freddie Mac,  the guarantors of home loans require this, according to a recent article.

I want to share with you a response we received back here at creditgeni.us. The results come back from Experian and Trans Union, as a result of our challenging items on a credit report.

If these items were legitimate in their placement on the credit report, how can they be removed? This all does bring up a point: if our credit is so important to our financial life, and it is, why are the bureaus so blasé and cavalier on how they report?

John Mackey



“Credit So Clean, People Want to Steal It”