Credit Bureaus: Why Biden Should Cancel 3 Major Credit Bureaus?
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The 3 major credit bureaus have been profiting of the American citizens a long time. Now itâs time the American people take back their credit power.
Letâs look at what the credit bureaus do and what they can change in this Q and A.
What are the 4 credit bureaus?
Most U.S. consumer credit information is collected and kept by the four national traditional consumer reporting agencies: Experian (formerly TRW Information Systems & Services and the CCN Group), Equifax, TransUnion, and Innovis (which was purchased from First Data Corporation in 1999 by CBC Companies).
Which credit bureau is most used?
Among all the credit score models, the FICO credit score is used by more than 90% of major U.S. lenders. You might have a different score calculated by a different scoring model with a different provider.
Can we have new credit bureaus?
Actually, if President Biden has his way, he will create a public credit reporting agency (CRA) to compete with the three major credit bureaus and maybe one day replace them altogether.
The push for a public credit reporting agency is part of President Bidenâs job and economic recovery agenda. The presidentâs agenda is inspired by a proposal from DÄmos, a liberal think tank with offices in New York and Washington, D.C. It calls for the formation of a new, national credit reporting and scoring division inside the Consumer Financial Protection Bureau (CFPB).
Whereâs the problem within the 3 major credit bureaus?
Unfortunately, racist policies like redlining shut Black and other minority families out of the opportunity to use government-backed mortgages to purchase homes. Such policies contributed to the racial wealth gap that still exists in the U.S. today. According to the Federal Reserve, Black and Hispanic families hold less than 15% of the wealth of white families, on average.
Adding to that, many studies indeed show that Black and Latino consumers (as a group) have lower credit scores than their white and Asian counterparts. A CFPB study from 2015 found that those same Black and Latino consumer groups are also more likely to have no credit scores at allâknown as being credit invisible.
ââŠBlack and Latinx borrowers [are] more likely to be denied credit than white borrowers and more likely to be charged higher interest rates on everything from home mortgage loans, to credit cards, to car loans,â Traub said. âItâs just one of many ways the financial deck is stacked against Black and brown consumers.â
Will the new credit bureaus allow me easier access to correct my credit file?
The DÄmos proposal calls for a public CRA thatâs more transparent, consumer-friendly and puts power into the consumerâs hands. Yet sponsors of the federal CRA idea canât explain how it would actually work.
âThe proposals for a public credit bureau option all suggest theyâre going to eliminate any and all alleged problems regarding bias or accuracy,â said John Ulzheimer, nationally recognized credit expert formerly of FICO and Equifax. âBut none of them explain in any detail how they plan on doing so. The question of âhowâ is never addressed.â
Michael A Turner, Ph.D, President and CEO of PERC (Policy and Economic Research Council), echoed these concerns.
ââŠsupporters of the public credit bureau approach, while well intentioned, are wafer thin on details,â Turner said. âThese groups are overwhelmingly lawyers who have no experience as lenders/practitioners and who therefore do not benefit from the wisdom of experience.â
Credit Errors Will Still Exist
Thereâs no indication that the CFPB would be any better at maintaining error-free credit reports on some 220 million consumers than Equifax, TransUnion, and Experian. Why? Because most credit reporting errors arenât caused by the credit bureaus themselves.
âThe problem of credit reports really doesnât have very much to do with the credit bureaus. The problem of credit reports has to do with the 15,000 companies that send them information every single month,â Ulzheimer said.
The credit bureaus are warehouses of information that they receive from data furnishers like banks, credit card issuers and collection agencies. âIf you swap out Equifax, TransUnion and Experian for some government run warehouse, youâre not eliminating the errors,â Ulzheimer said. âYouâre just changing the warehouse.â
How do I contact the three major credit bureaus?
Credit Bureau Contact Information
- Equifax. Equifax.com/personal/credit-report-services. 800-685-1111.
- Experian. Experian.com/help. 888-EXPERIAN (888-397-3742)
- Transunion. TransUnion.com/credit-help. 888-909-8872.
How do I talk to a real person at the credit bureaus?
Talk to a Real Person at Experian
Call 888-397-3742 if you want to order a credit report or if you have any questions related to fraud and identity theft. The number 888-397-3742-6 (1-888-EXPERIAN) will also work. You can place an immediate fraud/security alert on your credit with this number.
What is the new credit score system?
FICO is launching a new scoring model this summer, called the FICO Score 10. The new model will take into account a consumerâs account balances and missed payments over the last two years. About 40 million consumers will see their scores drop as a result.
Conclusion:
Itâs time to your power back and fight the credit bureaus, when it comes to the inaccuracies on your credit report.
If you need help with dealing with the credit bureaus reach out to 3waycredit.com.
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