4 Credit Bureau Fictions

By: Stuart Hunter

They exert enormous power over your life - as well as the lives of every other bill-paying American adult who cares about their credit. But what do you really know about the main three credit bureaus? Friend or foe? Fact or fiction?

Numerous surveys suggest the typical American knows little about the credit bureaus other than that they essentially control their credit reports - and as a consequence, their purchasing power. And that is how the credit bureaus want it, argues Dr. Randy Padawer, a clinical psychologist whose research into consumer credit has been featured in Smart Money Magazine and the bestselling FICO 850 seminar for The Motley Fool.

"The three major credit bureaus truly want consumers to believe that they've each been blessed with an officially sanctioned franchise," says Padawer, who has consulted for Lexington Law, a consumer advocacy law firm that helps consumers dispute errors and other questionable negative information from their credit reports.

The less you know about the credit reporting agencies, the more difficult it will be to correct a problem when one shows up on your credit report. And odds are an error will appear. Four out of every five credit reports contain errors, and approximately 25 contain errors serious enough to cause significant problems for consumers, according to research by the National Association of State Public Interest Research Groups.

Here are some credit bureau fictions and the real facts behind the fiction:

Fiction 1: There are only three "official" consumer reporting agencies.

Fact: Many companies are in the business of collecting, compiling and processing credit information.

Fiction 2: The big three consumer reporting agencies are official government entities.

Fact: "There are no official bureaus," Padawer says. "While most Americans perceive their credit reports to have at least the same legal standing as their driving records, the truth is that the government had no role in establishing the for-profit companies which produce them."

Fiction 3: The three major credit bureaus all record the same credit information.

Fact: Different creditors often report to different credit bureaus. In fact, there is no law that requires them to report to any of the credit bureaus. Consumer reporting agencies do not share information either, so if there is an error on your report from all three agencies, fixing it with just one of them does not mean the error will automatically come off your other two reports .

Fiction 4: Consumer reporting agencies will act quickly to help me rectify an error or delete inaccurate negative listings from my credit file.

Fact: Federal law requires Equifax, Experian, TransUnion, and all credit bureaus to complete an investigation into a consumer complaint within 30 days of when it was first made. The bureau may decide to keep the disputed item on the report as is, update but not delete the information, remove the listing, or deem the dispute frivolous. Given that it is easiest to simply judge your complaint as frivolous, many consumers find that their legitimate disputes get dismissed.

Increasingly, frustrated and fed up consumers are turning to credit repair professionals like Lexington Law to help them resolve credit reporting issues. Anyone who has disputed a listing on their credit reports knows the process can be long, maddening and perhaps without results. Involving a credit repair professional can achieve faster, better results.

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It is possible to legally fix your credit. To learn more about disputing the negative information in your credit reports, please visit Lexington Law, the trusted leaders in credit repair.

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