The CRAs are not even closely monitored by a governmental agency like the way a bank is. They have to adhere to any applicable federal and state laws just like any other business would. So overall, it is merely a company using an enormous computer to store and maintain a gigantic database. And within the electronic files of this immense system resides your credit report, amongst a couple hundred million others.

But most importantly, a CRA does not make money by ensuring that you have an accurate and complete credit report. In fact, the viewpoint that quite a few consumers have is that they believe that the sole purpose of the existence of the CRAs is to guarantee that your credit profile is free from error.

Instead, a CRA is in business to make money. And the primary source of revenue generated by this type of company is done by selling your credit report for cold hard cash to its subscribers as well as to just about anyone else who can get your permission to view your credit report.
 

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So how many times has someone else other than yourself checked your credit report in the past twelve months?

Multiply that number by a nominal fee and then multiply the total by a couple hundred million consumers every year and that is the reason why the CRAs are in business.

This explanation in itself is a harsh reality because most consumers expect a CRA to function much like a charitable or philanthropic organization or behave like a governmental entity dedicated for some egalitarian purpose. The concept that an organization, who holds an enormous amount of leverage over your personal finances, is operating solely for profit smacks of vulgarity in the eyes of a lot of people even though that is the way our economy has always worked.

But the credit bureaus are only part of the puzzle. The Big Three CRAs consists of a limited monopoly in which they merely gather credit information provided by creditors.

The real monopoly belongs to the Fair Isaac Corporation, which is contracted by all three credit bureaus. Fair Isaac uses its closely guarded proprietary software to calculate a credit score (FICO score) based on the information provided by CRAs. The CRAs then in turn resells numerous variations of your credit score to their subscribers.

However, the credit bureaus themselves do add much of the frustration that the ordinary consumer experiences. Correcting an inaccurate and incomplete credit report represents a cost to a CRA as compared to selling one, which is revenue. Contrast revenue to cost and it then doesn’t take long to figure out where a big corporation is going to focus its efforts on while neglecting the functions that cost money. And it is this lack of attention that has drawn the ire of many consumers.

The CRA doesn’t care if you have an erroneous misrepresentative credit report or if it is spotless. They make money by selling it; not by ensuring that it is accurate.

In that aspect, many people are rightly justified in being angry. By dedicating a minimal amount of resources that cannot ensure the accuracy of credit reports, the CRAs have created enormous burdens for the consumer. The process to verify the correctness and completeness of your credit report by the credit bureaus is shoddy at best. Congress has stepped in every several years to force the CRAs to clean up its sloppiness but there is still a long way to go.

Although they are careless and irresponsible, the CRAs are not evil. They are not purposely malicious. And they do not have any intent to repress a class of people in particular or to subjugate society in general. In fact, the credit bureaus really don’t care about you.

They care about selling your credit report to their subscribers. However, the process that they take in gathering your credit information is what hurts the consumer.
 

COMMENTS FROM READERS

I have been a minister for 43 years and I have seen the reporting of these credit bureaus cause more homes and lives destroyed than anything else. Their reports, even if true, have caused people to take their own lives because they could not go on with a negative report from these places. They are the most [ ] people in the world and need to be checked. There is some reason that people are afraid of them. They are rude and unfeeling in what they do. Thank you for your time Rev. Don

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