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Flawed credit reports hurt sales

A friend once shared that he went to buy a refrigerator during a “0 percent for 15 months” promotion and got turned down. It seems that a credit bureau had mixed someone else’s bad information in with his. It took more than five months to get it cleared up — and that was fast and fortunate. Fact is, it might never have been corrected.

So says a report from the Columbus Dispatch that revealed, according to the Federal Trade Commission, that nearly 20 percent of consumers have errors in at least one of their credit reports. For example, the FTC acknowledged that in 2012 almost 200 people complained their credit reports showed they were dead. Another 1,500 complaints involved a credit report that included someone else’s information. Moreover, in almost a third of the cases, the credit bureaus simply ignored making any corrections.

You would think getting a credit report corrected would be easy. It should be, but it’s not. Most likely you’re in for a runaround. Credit scores as determined by the three major credit bureaus can dictate things ranging from loan interest rates to getting employed. In reality, it gives the credit bureaus too much power over financial matters impacting individuals.

Well, what about the power that individuals have in such matters? The fact is that consumers have no legal clout to force credit bureaus to make the corrections. Federal law simply says the credit bureaus must conduct “reasonable investigations” when a dispute comes up. Ask any lawyer and you’ll find such vague language essentially allows the credit bureaus to do almost nothing and it does not mandate any corrections be made.

The credit bureaus simply take a lender’s word for anything at face value. Could it be because the credit bureaus sell their products to the lenders and the lenders provide the bulk of the information the bureaus use. Talk about a cozy setup.

It’s time to level the playing field for consumers and make some serious changes in the credit reporting field. For openers, the law and regulatory policies should be updated to give consumers clear power to demand accurate information in all their credit reports while making it the responsibility of the credit bureaus to undertake immediate investigations and issue timely responses to all complaints when factual errors are reported.

While I can’t document anything, I have a hunch some marine dealers have lost sales because a prospect’s credit score has turned up erroneously low, triggered by inaccurate information. Moreover, it is clearly right to ask why anyone should have to spend many months trying to prove to a credit bureau that the information being used to score their credit is wrong … never mind trying to tell the credit bureaus “I’m alive!”

Comments

One comment on “Flawed credit reports hurt sales

  1. captA

    Norm,

    I think you are 100% correct. I think the credit reporting agencies should be required to pay you to release your score to anyone. Here is an interesting twist. My wife lived overseas for 16 years, had a credit card in the country she lived and paid her bill on time. The credit reporting agencies have no access to the data because her financial transactions were not bases in the USA. So by default she gets a low credit score. The credit scoring company DOES NOT PUT IN HER REPORT THE FACT THEY DON’T HAVE ACCESS TO HER DATA.

    it is all a scam for the financial industry, the way the SAT’s are scam (and measure nothing) for college applicants.

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