Don’t Let Credit Bureaus Take Advantage
If you’ve been having trouble clearing up your credit score, there may be a reason for that. You could be experiencing roadblocks that have been put in place by credit bureaus to make it difficult to fix any errors in their reporting.
What is a Credit Bureau?
A credit bureau is a company that collects information about people’s credit rating and sells it to other businesses for credit checks and marketing purposes. There are dozens of credit bureaus in the U.S., but the three major credit bureaus are Equifax, Experian, and TransUnion. All bureaus collect more information than just credit ratings, including contact information and previous employers. Equifax even gathers salary information.
How Does a Credit Bureau Make a Profit?
Credit bureaus make money by selling the information in their database of credit ratings. If you’ve ever gotten a pre-approved credit card offer in the mail, chances are the credit card company got your information from a credit bureau.
Now here’s the important part. Credit bureaus make more money on bad credit ratings than good ones. If someone has bad credit, their information is worth more to companies like credit card companies and loan providers because those are the people who will have to pay higher interest rates on any debt they enter into while having bad credit.
It’s in the credit bureau’s best interest to keep as many people with bad credit in their database as possible. This is why it can be so difficult to get credit bureaus to correct information in their databases. It’s not legal, and they have been sued for doing it, but for credit bureaus, the longer someone is listed as having bad credit, the more profit they make.
How Can I Clear Up My Credit Score?
Not all credit problems are the fault of errors in credit reports. But if there are errors in your credit report, the first step to correcting them is to request your report from the credit bureau so you can check it. Every year, you can get a free credit report from each bureau that maintains your records by using AnnualCreditReport.com. If there are any errors on the report, contact each bureau with a request that they fix those mistakes. The bureau should then launch an investigation into the error and update your information accordingly.
If there are other issues with your credit score, you can try tackling the problem yourself, but it’s often easiest to seek professional help to receive guidance on how to improve your credit score. Reputable credit companies can review your credit reports with you and develop a plan to close credit cards, pay off debt, and steadily clean up your credit score.
We believe that everyone deserves a second chance when it comes to their credit. If you are seeking professional help to repair your credit rating, please contact us to find out how we can help you.