4 Myths About Credit Bureaus

Here are 4 myths about credit bureaus:

The Credit bureaus can have a tremendous affect on your life.  The unfortunate truth is that few Americans truly know the true facts of the credit bureaus, other than the control the bureaus have over their credit reports and the buying power those credit reports can give or take away from the consumer. The ignorance among consumers about the truth behind some of the myths of credit bureau operations is what credit bureaus like and this article will look at four myths of credit bureaus.

Myth 1. Credit bureaus are sanctioned with governmental authority.

The truth is that  no credit bureau is empowered by any kind of governmental authority, although the credit bureau will tell you otherwise. Credit bureaus are for-profit companies and are in the business of selling information that is obtained through subscribers who in turn buy that compiled information from the credit bureau. The people who work at credit bureaus can be thought of as salespeople who are selling a product.

Myth 2. The information on your credit report is unchangeable and cannot be changed by the consumer.

The Fair Credit Reporting Act allows you to change your credit report. The Fair Credit Reporting Act requires items that are not 100% accurate be removed if there is no verification of the item within a certain time limit. However, there is no guarantee that credit profiles are accurate because credit information is not shared among all the credit bureaus, so correcting an item on one credit bureau report may not take care of errors on other credit bureau reports. Another reason for inaccurate credit profile information involves the timing of subscriber reports as not all subscribers report at the same time or to the same bureaus. The consumer can challenge the credit bureau about information in their credit report but be aware doing so can be costly in time and money. 

Myth 3. Credit bureaus will act with promptness in helping to rectify an error or delete inaccurate, negative listings from my profile.

Federal law does require that the credit bureau complete an investigation into a complaint by a consumer in a 30 day time frame. The credit bureau makes the decision as to whether the disputed item is removed or updated but not removed and whether your complaint is just deemed frivolous. The easiest route for the credit bureau is to just deem the complaint as frivolous, so you may find your legitimate complaint dismissed.

Myth 4. Only three "official" credit bureaus exist.

In fact, many organizations are involved in the collection, compilation and processing of credit information from the big companies like Equifax to local businesses.

In conclusion, credit bureaus are in the business of selling information, information that can have a positive or negative impact on you. Knowing what is true and what is false can help you deal with the credit bureaus from a level playing field because you have some knowledge of how the credit bureaus operate.